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Murugappa Group mulls banking foray

TE Narasimhan  |  Chennai 

Chennai-based diversified Murugappa Group is contemplating starting a bank, provided the regulations favour its three important criteria, one of it being the group having a majority control in the bank like it does in other businesses.

A Vellayan, executive chairman, Murugappa Group, said, “We are interested in starting a bank. If the government opens it up for industrial houses like us, we will apply for the licence. It all depends on how the regulation pans out. When it comes to a bank, the key is the reach and trust, which the group enjoys across the society. The other major criteria should be, just like other businesses in the group, we should have a majority control.”

The Murugappa Group has its origins in 1900 and a majority of its business portfolio mirrors the economy. The businesses include agriculture, industry and financial services.

The group’s Cholamandalam Investment and Finance Company has reported a 46 per cent growth in top line at Rs 1,784 crore. The non-banking finance company (NBFC) arm of the group recorded a better-than-industry growth rate with its customer- focussed market approach, both in terms of increased product portfolio and reach in Tier-II and Tier-III centres.

The company is currently focussed on vehicle finance assets and home equity loans. It is also into gold loan business. Aggregate disbursements of the company for the year ended March 31, 2012 was Rs 8,889 crore, as against Rs 5,731 crore in 2010-11, an increase of 55 per cent. Overall, the total assets under management rose 40 per cent year on year to Rs 14,643 crore.

Net profit up 11% in FY12

The Murugappa Group has reported a 10.8 per cent growth in net profit to Rs 1,304 crore for the year ended March 31, 2012, as compared to Rs 1,182 crore in the previous year. The group’s total turnover rose 31 per cent to Rs 22,314 crore. The growth was led by Coromandel International Limited, which reported a 30 per cent growth in turnover to Rs 9,879 crore, followed by Tube Investments of India Limited (Rs 3,866 crore), Carobrundum Universal Limited (Rs 2,057 crore), EID Parry (India) Limited (Rs 2,635 crore), Chola Investment and Finance Company (Rs 1,784 crore), Chola MS General Insurance (Rs 1,347 crore) and others (Rs 745 crore). The group is planning to invest around Rs 1,000 crore in 2012-13. This includes green field plants by TII and Coromandel International. The two will invest around Rs 780 for both brown and green field expansions. The other major investments will be by EID Pary (Rs 50 crore), CUMI (Rs 85 crore) and others (Rs 85 crore). The investment will be funded through debt and internal accruals.

First Published: Sat, May 12 2012. 00:36 IST