While this year may be challenging, with interest rates rising and liquidity low, Rajiv Sabharwal, managing director and CEO of Tata Capital, believes the company’s debt book will grow faster than the industry. . “We will focus on tapping new geographies and moving deeper into smaller towns because growth in larger cities may be slower,” Savarwal said. The non-banking financial institution (NBFC) did not restructure any corporate and infrastructure loans during the epidemic.
The CEO said that while the demand for loans from SMEs has been somewhat muted in the last two years, it is on the rise. “While OEMs are doing well in the auto and steel business, sellers are doing well now.”
NBFC exited FY22 with a combined debt of Rs 94,349 crore, 22% more than FY21. Revenue rose 16% to Rs 5,261 crore while net profit rose 46% to Rs 1,648 crore.
While the amount of retail debt is increasing by 63% of the book and thanks to the revival in the housing sector, the corporate and SME sectors are also doing well. NBFC’s strategy has expanded to second, third and fourth cities, even as it explores opportunities in metros. “We are well-distributed and present across the price chain from affordable to prime,” Savarwal said, adding that consumers decide not only on the price of the loan but also on the time of approval. Like HDFC, Tata Capital has moved to a risk-based pricing model. It uses scorecard to make 80-85% credit decision using 50 parameters including input from CBIL.
Other areas where Tata Capital is advancing include used cars and two-wheelers. NBFCs are also expanding the unsecured personal loan segment. “The idea is to diversify the risk to products and clients. So, we are also expanding corporate books. No single incident will affect us and we should have the opportunity to cross-sell, ”Savarwal explained.
NBFCs provide working capital to dealers. The company has structured itself in such a way that a large part of its operations, from acquisition and service delivery to customer collection, is conducted digitally. “Three years ago, we used to serve only 10% of our customers digitally, now it has reached two-thirds of the customers,” he said. Digitization of operations has been done in a modular manner to make it more efficient. At the same time, the branch will continue to open, Sabarwal said.