Future Capital to set up 100 financial superstores

In a bid to become a financial powerhouse, Kishore Biyani-promoted Future Capital Holdings (FCH) is planning to set up 100 branches (financial superstores) in large Future Group stores to sell loans, insurance and real estate broking services.

Vice-Chairman and Managing Director V Vaidyanathan said through these superstores, Future Capital would target 100,000 customers and loan disbursals worth Rs 1,000 crore in 2011-12. The company is in talks with commercial banks for home and auto loan services. The company had also tied up with credit information agencies like TransUnion and Cibil to get the required data, Vaidyanathan said. Till the company starts home financing operations, it would work as a distributor of home loans.

“We believe our biggest competitive advantage and differentiator is the ability to provide services to customers of Future group stores. We will meet all the four financial needs of a customer —- borrowing, investment, protection and financial planning,” Vaidyanathan said.

A few of these stores, the sizes of which would range from 150 to 350 square feet, would soon be opened at Thane, Vashi and Kalyan near Mumbai. “There are 200 large stores (in the formats of Big Bazaar, HomeTown and Ezone). Depending on the performance of these, we would open more such stores,” he said.

Future Group has over 15 million square feet of retail space and over 200 million customer footfalls annually.

Though the Future Group had planned to launch such financial superstores earlier, the plans did not materialise. Following the split between Biyani and his former partner Sameer Sain, Vaidyanathan was roped in to to head Future Capital.

“We have seen 100 per cent growth in our loan book to Rs 3,000 crore this financial year (2010-11) and expect around Rs 5,000 crore in our loan book by 2011-12,” Vaidyanathan said, adding the loans would be priced competitively. The company’s cost of borrowings rose by 50-75 basis points in the last quarter. Future Capital works on gross margin of 4-5 per cent and is likely to maintain the same margins in 2011-12.

Future Capital recently exited two joint ventures with Centrum Capital. While Centrum bought Future Capital Holdings’ 50 per cent stake in FCH Centrum Direct for Rs 100 crore, FCH bought Centrum’s 50 per cent stake in FCH Centrum Wealth Managers for Rs 1 crore.