Mahindra Finance come in Mutual Funds Biz
As per reports, Mahindra Finance is ready to roll out its mutual fund biz.
According to Ramesh Iyer, managing director, the non-banking finance division of the $11.1-billion Mahindra Group is looking for in-principal nod from the securities market watchdog Securities Exchange Board of India (SEBI) and it should come by August 2011.
Mr. Ramesh said, “Now, we are in an advanced stage of launching asset management business. We have given all information to the regulator. SEBI inspection is also over. The proposed AMC will design product that suit the rural masses. It will not be a major force in urban market.”
Besides, Mahindra Finance had already applied for this biz in the year 2010.
Afterward, it became slow owing to poor market circumstances.
The company, involved in lending biz mainly in rustic regions, will back up its AMC biz in designing products, which suits the geography.
In the meantime, Mahindra Finance has decided not to increase lending rates further even if fund costs climbs up.
In its place, it now looks for options.
During the past one year, the borrowing cost has increased by 100-125 bps to about 9.50%. The company fruitfully forwarded it on to clients. Click to Apply for Housing Loan
“Every time, you cannot pass it on to your customers,” said the company MD. “Hence, we are negotiating with the manufactures and dealers of vehicles. We are asking them to allow some interest subvention or discount or credit facility. We are getting positive response. Ultimately, the cost of the customers will get controlled.”
For a loaning amount of Rs 3 lakh, Mahindra Finance anticipates an interest subvention of 2 or 3% or a discount of 2,000 to 3,000 on purchase cost.
Alternatively, it also eyes to lift up sales volume so that operation cost also descends.
It will assist counterbalance higher borrowing cost and uphold (NIM), currently at 11.50%.
Iyer show eagerness to do aggressive biz on housing loan.
Mahindra Rural Housing Finance, a subsidiary firm with a loan of Rs 300 crore, should ascend two-fold on an annual basis.
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