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Aditya Birla to invest Rs 10 bn a year in NBFC and housing finance company

Its lending business contributed Rs 13.06 billion to revenue in Q3FY18, up from Rs 12.46 billion in Q3FY17

Abhjit Lele  |  Mumbai 

Aditya Birla Group

Capital plans to invest Rs 10 billion each year to grow the lending business that it runs through two units — an and a Company — as it seeks to build its retail and loan book.

The combined outstanding loan book of its and business was up 41 per cent to Rs 465.22 billion at the end of December 2017, from Rs 330.47 billion in December 2916.

The group, which had invested about Rs 2.5 billion in April-December 2017 in housing finance, will take a call invest more in this year based on the business grow trend, Ajay Srinivasan, managing director and chief executive, said.

Its lending business contributed Rs 13.06 billion to total revenue in Q3FY18, up from Rs 12.46 billion in Q3FY17.

Srinivasan said at the size of the loan book on the finance company’s balance sheet was Rs 397.70 billion at end of December 2017. The loan book is a blend of corporate, and retail loans. Large and mid-sized have combined share of 51 per cent.

The and retail together form 36 per cent of the book. Going forward, retail and SME will be the thrust areas, with their share likely to grow to over 40 per cent in two or three years, Srinivasan said.

There is still an opportunity to build mid-sized and large corporate business. The company will look at taking exposure to completed projects so it is not exposed to execution risks.

The finance company will add 33 new branches to reach 72 by the first quarter of the next financial year. It plans to increase presence in tier-2 and tier-3 cities to target 85 per cent of SME sector revenue pool.

Referring to the company's business, Srinivasan said the loan book had doubled from Rs 32.35 billion in December 2016 to Rs 67.52 billion December 2017. Home loans had 60 per cent share, loans against property constituted 28 per cent and balance was to the construction sector.

The company has scaled up affordable housing finance with a loan book of about Rs 1.5 billion in less than a six months. Out of an annual investment plan of Rs 10 billion, part of the money will be deployed in

As for the of network for HFC, Srinivasan said it has 44 branches with 2,300-plus channel partners. It will add six more branches and stress more on direct sourcing of business, which has already risen to 47 per cent from 41 per cent a year ago.

First Published: Mon, February 12 2018. 16:50 IST