Ceat Financial Scouts For Primary Dealership Ally

Non-banking finance company Ceat Financial Services Ltd (CFSL) is scouting for a joint venture partner for its primary dealership (PD) business, which is being hived off as a subsidiary following regulatory norms. It has initiated talks with a couple of public sector banks in this regard.

The NBFC, as part of its growth strategy, has also firmed up plans to launch a finance portal -- www.fundspark.com -- that will cater exclusively to the retail and wholesale buying/selling of debt instruments like government securities and highly-rated corporate paper.

The process of subsidiarising the ailing CFSL's primary dealership outfit and finding a joint venture partner is expected to be through by the year-end. The PD arm, on an average, now logs a turnover of Rs 200 crore per month. The company is willing to cede up to 49 per cent stake to the potential joint venture partner.

CFSL was earlier in talks with a new generation private sector bank. However, the negotiations came unstuck after the merger talks of the bank with a peer bank fell through.

The NBFC, which has stopped lending operations (for both lease and hire purchase) completely, is now concentrating on paying off outstanding fixed deposits (FDs) of Rs 120 crore as per the schedule outlined by the Company Law Board (CLB) last year. CFSL intends paying off its outstanding liabilities over the next four years.

CFSL's portal, to be launched shortly, is intended to complement its physical infrastructure by providing investors with the convenience of an online platform to invest in highly-rated secure debt instruments. At present, all portals in the country catering to investments only in debt instruments have only online presence, where as CFSL is trying to put in place a brick-and-click model for the investors' benefit.