Manappuram Finance to diversify to cut reliance on gold loan portfolio

Company expects 20% growth rate on consolidated book in FY19

Non-banking financial company (NBFC) Manappuram Finance is in the process of reducing its reliance on the gold loan portfolio by expediting growth in other segments.   

The company said that it was confident that its issue of non-convertible debentures to raise a base of Rs 2 billion, with options of oversubscription to the tune of Rs 8 billion, would be successful.   

Commenting on the diversification plans, V P Nandakumar, MD & CEO of Manappuram Finance Ltd, said that at present, the gold loan portfolio accounts for 75 per cent of the company's business, while microfinance accounts for 15 per cent, commercial vehicles for five per cent, home finance for three per cent, and lending to other NBFCs accounts for a small portion.   

He said that the plan is to keep the gold loan portfolio at 50 per cent, with the other verticals growing to account for the remaining 50 per cent over the next 10 years.   

At the end of September 2018, the company's assets under management (AUM) stood at Rs 170 billion and revenue at around Rs 60 billion. The company is expecting a growth rate of 20 per cent on consolidated book this financial year, as compared to the 15 per cent growth rate recorded last year, Nandakumar added.