Mumbai: Non-bank lender Tata Capital aims to double its loan book in the next three years and is confident of cutting credit costs to under 1 per cent going forward, a top official said on Monday.
The fresh capital raised in the initial public offer will suffice for over two and a half years, its chief executive and managing director, Rajiv Sabharwal, told reporters.
Speaking to reporters, Sabharwal said, “If the growth rate of our country sustains as we hope it does, then our book can double in the next three years.”
The company’s loan book stands at Rs 2.3 lakh crore at present, and it took just one year to add Rs 50,000 crore to the assets under management (AUM), compared to the ten years it took to reach Rs 50,000 crore initially.
Sabharwal said the credit costs -- primarily booked because of loan calls going awry -- have touched 1.4 per cent after the merger of Tata Motors Finance into it was executed in May this year.
The credit costs for Tata Capital had always been under 1 per cent, and the company is “supremely confident” of getting it below 1 per cent “very soon”, Sabharwal said.
Amid concerns about asset quality from the micro, small, and medium enterprise loans at the industry level, Sabharwal asserted that the company is confident the portfolio, comprising over 26 per cent of the Assets Under Management (AUM), will hold up well, with lending to small businesses emerging as a high-growth segment.
“We do believe that with the credit quality holding strong, we should be able to grow at a very healthy pace in the SME sector,” he added.