MUMBAI: Temasek Holdings will infuse a further Rs 200-300 crore into its wholly-owned Indian non-banking financial arm, Fullerton, as Singapores sovereign investor seeks high growth fuelled by demand for loans from small enterprises, rural housing and mortgages in the world's fastest expanding economy.
Fullertons consolidated loan book grew at a rapid 47 per cent to Rs 17,678 crore in the fiscal year ended March 2018.
Rajashree Nambiar, who took over as its CEO in February, said the parent company will invest more noting the high returns on its investment in India so far. “Another Rs 200 crore to Rs 300 crore infusion is likely. We have delivered a return on equity of 14.20 per cent last fiscal and are expecting to grow at 30 per cent-plus,” Nambiar said. Investments into Fullerton have been regular for Temasek as high growth has burnt the NBFCs capital at a rapid pace. Its capital adequacy has dropped to 18.93 per cent in March 2018 from 22.54 per cent a year earlier. Temasek had invested Rs 200 crore in the year ended March 2017. Fullerton will also raise Rs 10,000 crore through debt from banks and instruments like commercial paper.
Nambiar said the new capital will be used to build scale in a business that is already diversified. “We are looking to build scale so that we position ourselves in the top three. We have to make our operating model more contemporary. We want to quicken our loan process. We will build partnerships and increase our reach through digital footprint,” she said.
Currently, more than 90 per cent of Fullertons loans are sourced through traditional channels like branches. Nambiar expects to decrease that number substantially. “Our sourcing is traditional now. We want to change radically in the next three years. This will increase customer acquisition rapidly and also drop our operational expenses,” she said.