Padmaja Reddy's Keertana Finserv pegs AUM at Rs 3,000 cr by March 2025
Padmaja Reddy's Keertana Finserv pegs AUM at Rs 3,000 cr by March 2025
 "Padmaja Reddy's Keertana Finserv pegs AUM at Rs 3,000 cr by March 2025")
Keertana Finserv, a new non-banking financial company (NBFC), expects assets under management (AUM) will grow to Rs 2,500-3,000 crore by March 2025 as it focuses on micro loans and gold loans. AUM was at Rs 762 crore in June 2023.
The firm, which is controlled by Spandana Sphoorty founder Padmaja Reddy, has approached the Reserve Bank of India for a NBFC-MFI licence to run a microfinance business under a subsidiary.
C H Manikanta, head of finance at Keertana Finserv, said equity capital for loan book growth would come from the promoter family in Financial Year 2023-24 (FY24). The company is also exploring options to tap institutional investors to raise equity capital in FY25.
Rating agency ICRA estimates that Keertana would need capital infusion of Rs 250-300 crore in FY24 and FY25.
The company has adequate capitalisation: it had Rs 224 crore as net worth as of June 30, 2023 compared to Rs 174 crore as of March 31, 2023. Promoters infused Rs 150 crore in FY23 and Rs 38 crore in Q1 FY24. The company plans to maintain gearing (debt to equity ratio) at around four times on a steady-state basis, said CRISIL, another rating agency.
Keertana’s funding requirement (money for lending) is pegged at Rs 1,200 crore in FY24. The funds would be raised through term loans, non-convertible debentures including a public issue and securitisation, said Manikanta.
CRISIL said the company’s portfolio comprises a wide range of asset classes including gold loans (55 per cent), group loans (30 per cent) and business loans and LAP (15 per cent).
As much as 94 per cent of Keertana’s loan portfolio is in Andhra Pradesh and plans to expand its branch network by entering Odisha and Gujarat. It has a presence in south India with 248 branches and will scale up the number to 400 by March 2025.