M&M Finance's looks to double AUM of Lankan venture

Company exploring entry into Bangladesh

Mahindra & Mahindra Financial Services Ltd (MMFSL) is looking to double the assets of its Sri Lankan subsidiary Ideal Finance Ltd to Rs 16 billion over three-five years.

The entity has been re-branded as Mahindra Ideal Finance where MMFSL raised its stake from 38 per cent to little over 58 per cent in July 2021.

Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance said, Mahindra Finance is looking at expanding in Asia. This strategic partnership with the Ideal Group of Sri Lanka is a significant step in that direction. The strategy is to work with local partners to enhance business presence. The company is exploring prospects for business presence in Bangladesh.  

Besides vehicle financing, the plan is to provide housing finance and insurance distribution. It would take call on entering the Mutual Funds segment in Sri Lanka at a later date, he added.

On capital infusion to support business growth, Iyer said Mahindra Ideal Finance has a capital adequacy of 34 per cent. This capital base plus retained earnings will support business growth. For any additional capital requirement it would take a call after one-two years.

The rebranded entity will offer a wider suite of products to include Gold Loans, leases for personal vehicles and consumer and personal loans. The company is also aiming to expand its branch network and enhance digital footprint across the island to service its customers as close to their doorstep as possible.

MMFSL also has a joint venture with the Rabobank group for operations in the United States of America. It also offers wholesale inventory-financing to dealers and retail-financing to customers to  purchase Mahindra Group products.

Iyer said the American unit has a balance sheet of $ one billion and giving a return on assets of eight-nine per cent. The growth is supported by accrued profits.