Rabo to up fee income to 40% of revenues

Rabo India Finance (RIF) plans to concentrate on fee-generating businesses, aiming to scale up its share to 40 per cent of its revenues over the next three to four years.

This shift in strategy is dictated by the enormous potential inherent in fee-based businesses and RIF has already begun implementing plans in this regard. Rabo India also aims to increase its client base from the current 250 to 350-400 over the next two years.

A non-banking finance company (NBFC), RIF is a wholly owned subsidiary of the Netherlands-based financial services major, Rabobank.

"Presently, fee-generating businesses contribute around 25 per cent to our total revenues. We are now aiming for a one-third income from fees by March 2008," RIF Chief Executive and Managing Director Sanjiv Bhasin said.

RIF aims to scale up fee-based income to 35 per cent of its total revenues within the next one-and-a-half years. "We plan to further scale this up to 40 per cent in the next three-four years," he said.

The NBFC plans to realise this through higher penetration in fee-generating businesses such as mergers and acquisitions, debt syndication, introducing investors to new projects and bringing together partners in joint ventures, among others.

While agri, food, retail, telecom, media, carbon credit and renewable energy would continue to be RIF's mainstay, real estate and the mines and metals sectors would constitute two new focus areas for the company.

Bhasin said that within the investment banking space, advisory services to the real estate and mines and metals sectors held tremendous money-spinning potential.

"Several private equity investors are keen on India's real estate. We can interest them in credible projects, both in commercial and infrastructure segments," he said.

RIF is close to sealing two deals in the real estate space. "We should be able to close the deals within the next 2-3-months," he said.

RIF's expertise and capability to raise term financing from local and international institutions would be a crucial factor in the mines and metals sectors. "If we can demonstrate our ability to do this, our credibility in the market will rise," Bhasin said.

There are no plans to infuse additional capital into RIF presently, nor to expand its branches within the country, he said, adding "we will expand only if we can get any value-addition."

Similarly, there were no plans to up RIF's headcount. "Our staff numbers have remained stable at just under 100 for the last two to two-and-a-half years," he said.