L&T Finance Ltd. aims to make a strong foray in the ever-expanding financial services sector. It provides financing for construction equipment of all kinds. It even tailors its schemes to fit the players’ profile. Being optimistic about the near future, G C Rangan explains the focus and strategies of L&T Finance.
L&T portfolioThough the overall environment is certainly difficult, L&T Finance has been performing decently on account of diversification and a prudent lending strategy. In FY14, its asset book, as a composite of its retail, mid-market and wholesale lending portfolios was ` 40,080 crore. This implies a growth of 20 per cent vis-à-vis FY 13. However, the lending portfolio is a bit more nuanced.
The company lends to buyers of commercial vehicles, construction equipment and farm equipment under the retail finance head, which accounts for 34 per cent of its asset book size. During the last fiscal, there has been a reduction in its asset book sizes for the construction equipment and commercial vehicle segments, while that for farm equipment has expanded massively.
In infrastructure financing, its focus continues to be on operational projects and high quality, larger-ticket relationships. The company has disbursed ` 6,800 crore to different infra projects in various segments whereas its loans and advances stood at ` 18,086 crore in as on June 31, 2014.
“We are also optimising our sales by financing used construction equipment. We see this segment to grow at a faster rate than new construction equipment in short-term,” hopes Mr Rangan. “This has helped us considerably in reducing risk as most of the customers are existing customers with proven track record; also yields are better than new equipment finance.”
The L&T Group’s focus is around the consumer oriented segments or what it calls B2C (retail) segments. Rural demand has continued to be strong and can be supported with a good monsoon. The company’s disbursements or the portfolio around the B2C segment comprising of housing, two-wheelers, cars, tractors and microfinance is doing well for the past 5-6 quarters. It has increased by 11 per cent in FY14 than FY13.
Why L&T FinanceEvery company has their own strategies and ways of working. As far as L&T Finance is concerned, it considers consumer as the king. With service and transparency being its motto, it feels good service with transparency should be provided.
“Our aim is to provide comprehensive financial services so that the customer can get one stop solutions to all their financial needs from agri-loans, home loans, auto loans to mutual funds,” assures Mr Rangan. “Our interest rates are almost affordable comparing with other NBFCs, and as far as service is concerned, our consumers do like our NBFC.”
Focus and offerings“We have carved out a focussed team to work on SME space. The team has been placed at key SME hubs. Our initial focus is towards auto (including CE SMEs) and agri SMEs,” comments Mr Rangan.——————————————————————–Our aim is to provide comprehensive financial services so that the customer can get one stop solutions to all their financial needs from agri-loans, home loans, auto loans to mutual funds.
-G C Rangan, Chief Operating Officer, L&T Finance Ltd.