Mahindra Finance's rural arm eyes Rs 1000-cr biz this fiscal

Mahindra and Mahindra Financial Services' rural housing finance subsidiary's loan book will grow up to Rs 1,000 crore by the end of the fiscal, a top company official has said.

Incorporated in 2007, Mahindra Rural Housing Finance (MRHF) offers loans for buying, renovating, extending and improving homes in rural and semi-urban markets.

"We have been doubling the book almost every year now and this year we hope to be faster. We are at around Rs 700 crore right now and it will grow to Rs 900-1,000 crore by end of the fiscal," company Managing Director Ramesh Iyer told PTI here. It was Rs 535.2 crore last fiscal.

Iyer said the average loan size is of around Rs 1.5 lakh.

He said the company is targeting to take the book up to Rs 4,000 crore by end of FY15 as there is good demand for the company's offering.

He said the network and customer portfolio of the parent Mahindra & Mahindra Financial Services is employed for the business.

MRHF's outstanding loan book had stood at Rs 676.7 crore as of the September quarter, up from the year ago's Rs 418.3 crore, according to an analyst presentation.

The company, which is owned 87.5 percent by the parent Mahindra Finance with the rest held by sector regulator National Housing Bank, had notched up a post tax profit of Rs 62 crore for the six months ended September 2012 as against the Rs 38 crore in the year-ago period.

It operates in nine states including Gujarat, Maharashtra, Andhra, Karnataka, Tamil Nadu and Kerala, its website says.

Mahindra Finance recently raised Rs 867 crore through a qualified institutional placement, which took its total capital adequacy to over 20 per cent and suffice it to fund growth for the next two years.