Arca Fincap looks to grow assets by 25-30%, sees reasonable loan demand – Gudstory

“Although specific numbers are not being discussed today, it is our goal – internally, as a management goal – to grow our asset book in the range of 25-30% year-over-year,” said Executive Vice President , Vimal Bhandari said. -Chairman and Chief Executive of Arka Fincap.

As of September 30, the company’s assets under management (AUM) were 4,033 crores. Its gross bad loan ratio was 0.19%. “There is always a demand for money in a growing economy,” Bhandari said.

The company sees demand for loans originating from the secured small and medium enterprise (SME) business sector, he said. On the corporate side, he said there is an assortment of borrowing units in the sector 25-50 crores and many companies require funds mainly for long term working capital. The third segment is construction financing for the real estate sector, Bhandari said.

“As you know, the sector is performing really well and demand for money is also coming from there. If you look at the overall macroeconomic perspective of credit growth, India is still experiencing quite good credit growth. It’s just a question of picking and choosing the areas you want to work in, Bhandari said.

The lender has announced a public issue of its secured, rated, listed, redeemable non-convertible debentures. Also includes option to retain oversubscription up to an amount of Rs 300 crore 150 crores. NCDs offer coupon rates ranging from 9-10% per annum with quarterly and annual interest options. The tenure of these securities is 24 months, 36 months and 60 months.

“We have done a large number of privately placed debenture issues, but this is the first listed debenture issue, which is basically aimed at retailisation,” Bhandari said.

He said the bond issuance was planned as part of its liability diversification strategy. The company is raising money from every component of the institutional market, such as banks, mutual funds and family offices, he said.

Arka Fincap’s capital adequacy ratio stood at 27.59% as of September 30, against the regulatory requirement of 15%.

Asked if the promoter would consider infusing capital, Rahul Kirloskar, non-executive, non-independent director of Kirloskar Oil Engines Ltd, said the company does not require additional funds right now. “We may have to consider this in July or August. “I can’t predict what I’ll do,” he said.

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Updated: 05 Dec 2023, 06:40 PM IST