Mid-level gold loan firm Indel Money is expecting to close this fiscal with a loan book of around Rs 1,600 crore as it sees rising demand for credit.
The Kochi-based company also announced its fourth debt issuance to raise up to Rs 200 crore, offering as much as 12.25 percent annual yield to investors. The issue opens on January 30 and will close on February 12, the management told reporters here.
"We closed the December quarter with an outstanding loan book of Rs 1,410 crore, and going by the current monthly run-rate, we should be adding another Rs 200 crore to the AUM by March, taking the loan book to Rs 1,600 crore. We closed last fiscal with an AUM of Rs 1,154 crore from which we had earned a net income of Rs 38 crore," Umesh Mohanan, the executive director of the company told PTI.
He said close to 90 percent of the loan book comes from gold loans, and its total pledged gold holding is over 3.5 tonne.
The company introduced long-term loans up to three years in the segment that used to have only three to six months tenor before. It also provides unsecured consumer credit apart from small business loans and loans against property.
Among private players, the gold loan market is dominated by the three Muthoot group entities and Manappuram Finance, all from Kerala, and they also have a maximum customer base in the home state. But Indel has Tamil Nadu (28.2 percent), Karnataka (27.5 percent and Odisha (16 percent) as the largest markets. Kerala contributes only 3.5 percent of its business, Mohanan said.
On expansion plans, he said the company will be entering Gujarat and the Andaman islands this quarter and Bengal and the northeast next fiscal.
The company has over 265 branches across Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Odisha, Maharashtra and Telangana, Puducherry, Delhi, Uttar Pradesh and Gujarat. It has added over 60 branches this fiscal and will open 25 more in the current quarter.
For the next fiscal, Indel plans to have over 425 branches across 12 states, expanding to the eastern and northern markets, he said.
The base size of the secured, redeemable, and non-convertible debentures issue is Rs 100 crore, with a greenshoe option of a similar amount, Mohanan said.
At the peak rate of 12.25 percent effective yield, an investor who chooses 72 months tenor will get double the invested capital, Mohanan said, adding the minimum tenor is for 366 days and the maximum for 72 months.
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