Alpic Finance In Demerger Mode To Better Returns
Alpic Finance Ltd proposes to adopt the 'factory-distributor' module as a part of its restructuring, according to a company official. Under the new plan, the non-banking finance company has decided to separate the development of financial products - such as leasing, hire purchase and stockbroking -- from actual distribution of these services.
The company already has a combined distribution services division called Allianzers. As part of the planned architecture, Alpic plans to demerge the division into a separate outfit -- Allianzers Distribution Services Ltd. Alpic has got shareholders' nod for the demerger, but has yet to get necessary clearance from the Centre and the Bombay High Court.
The chartered accountant firm MGI Chan-ma & Co valued the proposed distribution arm of the company at Rs 170 crore.
The official said that the demerged distribution entity though will be an investor in the various 'factories' will stay away from interfering in the non-banking finance companies' day-to-day operations. He said: "The distributor will have the autonomy to enter into strategic alliances with other financial companies for distribution of their products, while the different factories can engage other distribution entities for marketing the product as well. One cannot enjoy such kind of independence in a holding-subsidiary module as followed by most of the other financial companies in the country."
"Allianzers will ensure that the distribution activity is viable and profitable, while the 'factory' will concentrate on producing services and choose strategies for the best outcome. This will ultimately result in better returns to the shareholders of the company," the official said.
The official further pointed out that the demerger, when it takes place, will reduce the overhead cost of distribution for Alpic.
Alpic, engaged largely in medical equipment financing and truck financing, had earlier planned to merge with three other NBFCs -- Apple Finance, Apple Credit and Srei International -- to have an edge in the industry. The merger plans, however, fell through as it failed to meet due diligence.