Two days after Manappuram Finance came out with a Rs 1,000 crore non-convertible debenture issue, it said it will diversify its business portfolio and focus on the Micro, Small and Medium Enterprises (MSMEs) sector, according to VP Nandakumar, Managing Director and CEO of Manappuram Finance.
He added that the company wants to be an active player in the MSME sector, and is thus “diversifying our business portfolio by lending to MSMEs, small home loans and vehicle financing.” According to him, nearly 75 percent of the company's Rs 17,000 assets under management is the gold loan portfolio.
Speaking about the asset-liability match following the news of the diversification, he added, “A major portion of the business will be financing against gold and we have more than sufficient capital adequacy ratio.” He added that Manappuram lends about 67 percent of gold value and nearly one-third of the gold value is with the company as security.
The news follows the company’s decision to come out with an NCD issue. The base Tranche-1 issue size is Rs 200 crore, with the option to retain oversubscription upto Rs 800 crore. Further, the face value of the debenture is Rs 1,000, and the minimum application amount is Rs 10,000.
According to the company, these secured NCDs are available in 10 options, and their interest rates vary between 9.6 percent and 10.4 percent.