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Gold Loan Player Indel Money Scouting For PE Funds

The impact of his long-term loan offering forced entrenched biggies like the Muthoot groups and of late Manappuram Finance to follow it, moving away from their standard three months tenor.

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Non-banking lender Indel Money is in active discussions with private equity players to divest 10-15 per cent for Rs 140 crore, as it charts out a faster growth trajectory by entering newer geographies this fiscal and an eventual listing.

Diversified Indel Corporation, with over Rs 1,000 crore revenue, made a foray into gold loans in 2013, offering one-year-long loans against gold pledge first and then for two years in an industry that has never looked beyond three months.

The impact of his long-term loan offering forced entrenched biggies like the Muthoot groups and of late Manappuram Finance to follow it, moving away from their standard three months tenor.

The organised gold loan market, which is majorly with banks, is projected to hit Rs 4.6 lakh crore this fiscal.

Currently, Indel operates 191 branches mostly in Kerala, Tamil Nadu, and Karnataka, and is adding nearly 100 more, mostly across Maharashtra, Telengana and Andhra this fiscal and take it to over 400 by FY23.

Indel closed FY21 with a live gold loan AUM of Rs 580 crore, up from Rs 336 crore in FY20 and is targeting Rs 850 crore AUM in the worst-case scenario and Rs 1,000 crore in the best scenario this fiscal, and to top Rs 1,300 crore by FY23, Umesh Mohanan, chief executive of Indel Money and executive director of Indel Group, told PTI.

“We are in active discussions with a number of PEs from the US and Singapore to raise capital. We can divest 10-15 per cent of our equity to a good investor, for around Rs 140 crore, depending on the quantum of dilution, and a valuation north of Rs 400 crore. We hope to finalise the investor by December,” said Mohanan, the grandson of the group founder PJ Pillai, a pilot who had flown the first prime minister Jawaharlal Nehru many a time.

The Indel group is into automobile retailing, which is its biggest business in terms of topline and employee count, with over 900 staff.

In FY20, it had a topline of over Rs 1,100 crore, which declined to Rs 900 crore in FY21 after he quit Hyundai dealerships due to differences of opinion on stock holding, which it wanted to cut to 20 days from 60 days. The pandemic also played its part, he admitted.

Indel is the single-largest dealer for Ford India, contributing over 13 per cent of the all-India volume and the only exclusive dealer for Volvo in Kerala. It also retails many other car brands and almost all 2-wheeler brands in the state.

The group is also into hospitality under the M-Star brand with 150 keys across five properties in key Kerala cities apart from film production and media.

Mohanan, an investment banker having headed a USD 5 billion UAE fund until 2016, said the equity dilution will be only in Indel Money as he wants to make this the flagship business for the group and take it public over the next two three years.

Indel is also piloting a new model in gold loan in Bengaluru, wherein it will pick the gold from the customers’ homes and deliver money home.

Mohanan said Q1 was a washout but is sanguine about faster recovery that's already underway going by the collection levels of over 80 per cent since July.

On fundraising, he said they will be launching the maiden NCD issue of Rs 150 crore later this month or early next month. The rest will be done through securitisation and bank credit. 

(PTI)