Aditya Birla Finance (ABFL) — the lending arm of Aditya Birla Capital (ABCL) — plans to leverage its recently acquired triple A rating to grow its loan book by 35% with a focus on small businesses. ABCL was created by carving out Aditya Birla Nuvo‘s financial service business into a separate entity and was listed in September 2017.
Aditya Birla Nuvo was subsequently merged with Grasim Industries. Last month India Ratings upgraded ABFL to IND AAA from IND AA factoring the strength of its new parent.
Speaking to TOI, Rakesh Singh, CEO, ABFL said ABFL has a loan book of Rs 38,900 crore as on September-end and would maintain its growth rate of 35-40% with an increased focus on small and medium enterprises (SMEs). According to Singh, demonetization and the introduction of the Goods and Services Tax (GST) has resulted in formalization for the SME segment making it easier to lend to them.
ABFL has an associate Aditya Birla Housing Finance which does mortgage lending in the group. The company has Rs 6,000 crore balance sheet with individual loans accounting for 60% of the total book. “Our target is the self-employed segment with a focus on credit quality.” said Singh.
Of the Rs 38,900 crore loan book, large corporates account for 35%, mid-corporates 17%, retail 9% and SME 25%.
ABFL plans to strengthen its structured lending platform to SMEs across lending categories that are largely untouched by banks and large lenders. The company will add 33 new branches to reach 72 branches by March 2018 to further strengthen its foothold in Tier-II & Tier-III centers and offer lending solutions such as working capital demand loan, lease rent discounting, and supply chain financing solutions.
(This article was originally published in The Times of India)