IndoStar looks to grow its loan book to Rs.1200 cr

The Dollar Business Bureau

Witnessing a combined annual growth rate (CAGR) of 49 percent in its assets, NBFC IndoStar Capital Finance, a wholesale credit institution, is eyeing to ramp up its lending for Small and Medium Enterprises (SMEs) this year and to increase its loan book five-fold to Rs.1,200 crore. 

Vimal Bhandari, Chief Executive and Managing Director, IndoStar said, "We are looking to ramp up our SME business in 2016 and create an AUM (assets under management) of Rs.1,200 crore by expanding geographically.”

“We have closed our SME portfolio in the first year with an asset size of Rs.223 crore, through our four branches," he added.

Bhandari mentioned that the major drivers of growth will be digital strategy and direct business. 

IndoStar entered into the SME portfolio in April 2015, with an aim to provide lending to businesses and professionals such as architects, doctors, CAs and lawyers. The company provides lending with a ticket size of Rs.50 lakh to Rs.5 crore for a period of 15 years, which can be secured through collateral and cash flows. 

Launched in April 2011, the NBFC is promoted by worldwide investors such as Everstone Capital and Goldman Sachs. At present, the loan book of the company stood at Rs.4,265 crore, at a 49 percent CAGR, whereas its net profit recorded at 38 percent in the same period.

The first year of operations of the company showed a loan book of Rs.873 crore. 

During the period of 2015-16, the company recorded a net profit of Rs.192 crore, a rise of 29 percent compared to Rs.149 crore in the previous financial year.

The NBFC has been keeping a sound asset quality and ended the year with a net NPA of only 0.2 percent.