India's Mahindra Finance aims to nearly double non-vehicle loan book in FY25, exec says

Mahindra and Mahindra Financial Services

06/03/2024 09:04

By Siddhi Nayak
       MUMBAI, March 6 (Reuters) - India's non-bank lender
Mahindra & Mahindra Financial Services will adopt a de-risking
strategy and aims to nearly double its non-vehicle loans
portfolio in the next financial year, its vice chairman and
managing director said on Wednesday.
    "Our aim is 20% of the balance sheet should comprise of
non-vehicle business," Ramesh Iyer told Reuters, adding its
focus will be on financing small and medium enterprises (SME)
that include business loans, machinery, and loans against
property.
    Currently, non-vehicle finance comprises 5%-6% of the
company's loan book. The target will be met in phases and may
not exceed 10% in 2024-25, Iyer said.    
    Mahindra Finance is one of India's largest deposit-taking
non-banking financial companies, offering vehicle loans, SME
finance, personal loans, and housing finance, among others.
    Within vehicle loans, Iyer expects pre-owned vehicle
segments to drive growth on the back of high demand and
attractive yields.
    The company plans to grow its assets under management by 25%
on-year to 1.25 trillion rupees in the next financial year, Iyer
said.
    The non-bank lender expects net interest margins to be at
around 7% by March-end from 6.8% in the fiscal third quarter,
and then inch up to 7.2% by the end of the next financial year,
assuming the Reserve Bank of India starts cutting its key
lending rate.
    Mahindra Finance will also look to tap the overseas market
for funding for the first time in the next financial year
starting in April, through either loans or bonds, Iyer said.
    "It will depend on what is the landed cost of money. We will
look at the liquidity situation in India, the all-inclusive cost
of fund and the period for which such funds are available."
    The company is also looking to add two more banks as
partners for co-lending and will open 125 new branches in the
next financial year.

 (Reporting by Siddhi Nayak, editing by Swati Bhat and Eileen
Soreng)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
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