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Manappuram Finance said on Thursday it plans to start lending for home purchases and to finance small and medium enterprises . Its stock rallied by as much as 8 per cent in intraday trade on the news before closing at Rs 16, up 6.31 per cent, on the BSE. The non-banking finance company said it will float a separate subsidiary for its home loan business.
Kapil Krishan, Chief Financial Officer, said, “This (the plan) is on the drawing board now. No allocations (resource) have been made yet.”
No time frame too has been set for the housing loan entry , he said.
The company said it will also get into the secured SME lending business in three months.
Explaining the rationale of diversifying its business, V. P. Nandakumar, Executive Chairman, said, “The regulators also want to see a diversified portfolio. About 30 per cent of our gold loan customers run small enterprises. So, this will open up another avenue for us to lend.”
Risk factor The RBI had expressed concern over the concentration risks of some gold loan companies. The regulator, in September, set out rules to prevent unbridled growth of gold loan enterprises.
It has capped the amount of loan a gold loan company can lend against jewellery.
“We will continue to be a pre-dominantly gold loan company for now,” Nandakumar said. The Kerala-based company has an outstanding gold loan portfolio of over Rs 10,000 crore and holds about 51 tonnes of gold.
> satyanarayan.iyer@thehindu.co.in
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