Religare Finvest, the consumer finance arm of Religare Enterprises, is shifting focus to financing of commercial assets and lending for small and medium enterprises after turning its back on risky personal loans, its CEO said.
* Religare Finvest plans to grow total loans extended to Rs 10,000 crore from the current Rs 960 crore
* Personal loans turned risky after tighter regulations and the focus is shifting to business loans
* It plans to raise funds by issuing debentures and leveraging bank credi
Kavi Arora told Hindustan Times that the company has extended loans totalling Rs. 960 crore so far and aims for a gross disbursement of Rs. 11,000 crore over the next three years, multiplying its loan book more than ten-fold.
Religare Finvest has branches in 75 cities for its distribution business, while lending is done in 18 cities. “In the next two years, we will expand business in all the places where we are already established,” said Arora.
Religare Finvest, an offshoot from the promoters of Ranbaxy, started in 2006 decided to abandon personal loans last month as conditions for unsecured loans had turned tighter.
The new business lines started in January.
Currently, Religare Finvest provides loans against property or securities, business loans for SMEs and loans for construction equipment, besides financing infrastructure support, commercial vehicles and initial public offer (IPO) of shares. It also provides personal financial services.
The company which currently has equity of Rs 1,350 crore plans to raise between Rs 2,000 and 3,000 crore next year through non-convertible debentures and bank lines of credit to fund growth.
The non-banking finance company (NBFC) made a net profit of Rs 48 crore in 2008-09.