Almost all Essel Finance’s businesses were through acquisitions, says MD

Essel Finance Management, the financial services arm of media baron Subash Chandra-controlled Essel Group, has been quietly building up a portfolio of businesses across the financial services spectrum through acquisitions. The four-year-old non-banking finance company (NBFC) is no longer a start-up as most of its businesses have matured, and is gearing to become a large financial services conglomerate. In a conversation with BusinessLine , Essel Finance Managing Director Amitabh Chaturvedi says that the firm is also moving into housing finance, investment banking and is even setting up a mutual funds venture. Excerpts:

Essel Finance has built up a portfolio of businesses across financial services through acquisitions. Would this be the way going forward and what would be the ticket size?

Almost all the businesses, except housing finance and private equity, were through acquisitions. So, we acquired an NBFC licence first, then we grew that business for some time and then acquired Intec Portfolio. In our forex business, we bought 70 per cent stake in the company, and in mutual funds we bought 100 per cent equity in that company.

If I add any new line of business, I would look at acquisitions. We did small acquisitions in the past to learn and give confidence to our shareholders. We can look at large size buys and capital is not a constraint.

What’s your strategy for the foray into insurance business? How is your forex business doing?

We are already into insurance broking. We have a distribution company where we advice customers on insurance. But to get into insurance products, whether general insurance or life insurance, I feel it will not happen for the next three years. These two businesses require huge amount of capital. But it is there on our radar.

In the forex business, our current run rate is $70-80 million a month. At this rate, by March 2018, we will have a turnover of a billion dollars.

Earlier, Essel Finance wanted to foray into manufacturing of white-label ATMs. Why did you backtrack?

In 2015, we thought that ATM was one way to get into a banking activity. We felt there is need for one more white-label ATM provider.

We also went to the RBI, but the regulator said that there was no licence available then, as in 2013-14 it gave licence to seven non-banking companies. The day RBI reopens that window, we will get into white-label ATM business.

What are your plans on the housing finance front?

We just got licence around 9-10 months back. We also got a team in place. By September we will launch the company.

By March 2018, we will have a small portfolio of around ₹100 crore and the next year we will look for either acquiring one more larger size HFC (housing finance company). I see this company having an advances portfolio of ₹5,000 crore by 2020.

You were also looking to set up an investment banking firm? What’s the status?

We have got the licence, but we don’t have a team. We are in talks to hire an entire team from an organisation, and if that happens, we will be probably ready by October.

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