The Hindu Business Line : Good times for 2-wheeler finance market

THE two-wheeler finance market is on the growth path with increasing demand in semi-urban and rural areas. The organised market is estimated to be Rs 6,000-7,000 crore.

Mr V. Vaidyanathan, Senior General Manager (Retail), ICICI Bank, said: "Traditionally the top 40 locations in the country have been contributing 75-80 per cent of the industry's total business. But the second-rung markets will have a bigger roll in the coming days. The bias in favour of the top locations is coming down.''

The second-rung markets include businesses from the 41st location to about 300 locations across the country.

"While earlier there was limited awareness about availability of two-wheeler finance in the rural areas, the demand from those areas is now picking up,'' said a Centurion Bank official.

Although ICICI Bank has not said so, market watchers find its slated acquisition of the Tata Finance portfolio as a sign of the new emerging trend.

"The acquisition is likely to help them penetrate several markets in which they were earlier not present,'' said an industry observer.

Tata Finance's portfolio pertains to loans in 268 towns, most of which are in semi-urban and rural locations.

Mr Vaidyanathan said, "Tata Finance's exit should create a space which we can occupy. We will also have the advantages of a larger book size. In terms of geographical reach, we were present in most of the areas in which it was present.''

Players are now waiting to see what ICICI Bank will do. But there may be no immediate goodies for the two-wheeler aspirant in the form of an interest rate cut.

ICICI Bank eyeing Tata Finance staff

FOLLOWING ICICI Bank's purchase of Tata Finance's Rs 350-crore two-wheeler portfolio, ICICI Bank is also eyeing its staff.

With Tata Finance exiting the two-wheeler finance business, most of the 113 employees in that division are currently undergoing interviews at ICICI Bank. "All of us, including the senior people, are being interviewed by ICICI Bank. But we have no idea how many people will be taken on. We are not very clear on the terms of employment either, but if the offer is very attractive we will accept it,'' said a senior official at Tata Finance Ltd, who has been interviewed by ICICI Bank himself.

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