Muthoot Pappachan Group is aiming to disburse ₹25,000 crore in the current fiscal through its various financial verticals Muthoot Fincorp, Muthoot Capital, Muthoot Microfin and Muthoot Housing. The group had disbursed ₹18,000 crore during the last fiscal.
Of the targeted disbursement, gold loans will account for ₹19,000 crore as against last year’s ₹15,000 crore, Thomas John Muthoot, Chairman and Managing Director, Muthoot Fincorp, said.
The diversified loan portfolio, other than the flagship gold loan product, includes low-value housing loans, two-wheeler loans, microfinance and micro, small and medium enterprise (MSME) loans.
Muthoot Fincorp, he said, is in advance talks with foreign private equity funds to raise ₹400-500 crore for its microfinance business.
The objective is to broaden its diversified lending portfolio with more consumer-centric products and de-risk itself from the impact of volatile gold prices. “We are in talks with some foreign PE funds as part of the strategy to de-risk the assets by diversifying into non-gold credit business,” he told BusinessLine .
Declining to reveal the names of those companies, he said the fund-raising in the microfinance business is likely to be completed within a couple of months.
The transaction will help the company double its asset book to ₹5,000 crore in two to three years from the current ₹2,100 crore.
The company’s SME gold loan vertical is hoping to achieve an asset size of ₹600 crore this year.
The company plans to disburse two-wheeler loans worth ₹1,200 crore as against last year’s ₹1,000 crore. There are also plans to lend ₹600 crore to the underfinanced MSME sector.
Quoting a recent study, he said the growth through product diversification, favourable sector dynamics and renewed customer engagement will ensure sharp improvement in return ratios of gold loan NBFCs over the next few years.