Muthoot targets Rs 1,000 cr AUM

Muthoot Capital Services Ltd (MCSL), a Non Banking Finance Company (NBFC) arm of Muthoot Pappachan Group focusing on automobile financing, is planning to infuse around Rs 700 crore, by end of fiscal 2012-13, targeting a total Asset Under Management (AUM) of around Rs 1,000 crore by the time. As part of this, the company is expecting to expand its operations to four more states during the period along with expansion of product offerings.

Major portion of the capital infusion for next fiscal year would come through debt from banks, said Thomas George Muthoot, managing director, Muthoot Capital Services and director, Muthoot Pappachan Group.

 

“We are expecting almost 60 per cent of the total capital infusion for next fiscal to come from banks, while 30 per cent will be from internal accruals and the rest from debentures we offer to our customers,” said Muthoot. The company, which posted an AUM of Rs 77 crore during fiscal year 2010-11, is planning to increase the AUM to Rs 400 crore by end of current fiscal year. It would soon launch its three-wheeler auto finance product and used car financing services across South India, which is currently offered in Kerala.

The company would also expand auto loan services to Gujarat, Maharashtra, Madhya Pradesh and Rajasthan, through outlets of Muthoot Fincorp, the flagship company of the group.

With expansion of three wheeler business to other states, the company expects this segment to contribute around 24 per cent of the total business in future, while two wheeler finance business would be around 75 per cent of the business. At present, almost 95 per cent of MCSL’s business is from two wheeler finance while four percent constitutes to three wheeler finance and around one per cent from used car financing business.

The company would look at tie up with organised used car sellers in the States in which it operates, though it would not pursue the segment of business aggressively, he said.