homefinance NewsExpect pre owned vehicle segment to drive growth; eyeing acquisitions: M&M Financial Services
Expect pre-owned vehicle segment to drive growth; eyeing acquisitions: M&M Financial Services
Ramesh Iyer, Vice Chairman and Managing Director, Mahindra & Mahindra Financial Services, believes disbursal growth will not be a challenge for the company. Iyer expects disbursals in Q4 to be better than Q3. In fact, he expects pre-owned vehicle segment to be the driver of growth. Additionally, he mentioned that the company is looking at vehicle financing segment for acquisitions.
Ramesh Iyer, Vice Chairman and Managing Director, Mahindra & Mahindra Financial Services, believes disbursal growth will not be a challenge for the company. Iyer expects disbursals in Q4 to be better than Q3. In fact, he expects the pre-owned vehicle segment to be the driver of growth.
In an interview to CNBC-TV18, he said, “The supply side currently is under pressure because the exchange programmes are not happening since new vehicles are not available. Once that improves, pre-owned vehicles will be a growth driver.”
Iyer is of the view that digital space will help the company in low-ticket sized loans. Additionally, he mentioned that the company is looking at the vehicle financing segment for acquisitions. “We are a very strong vehicle, tractor finance company and we would look at acquisitions around that space. So we would not shift our gear and go strategically to another asset class which we are not currently doing,” he said.
Iyer expects gross net performing assets (GNPAs) to decline to 8.5-9 percent from current levels by this fiscal end. Elaborating further, he mentioned that 80 percent of the provisions would, in fact, reverse by March. He further explained that GNPA gap between Indian Accounting Standards (Ind AS) and the Reserve Bank of India’s (RBI) directive was Rs 2,800-3,000 crore. However, provisions in the range of Rs 500-1000 crore will not be required immediately.
Also Read: M&M Financial Services bets on pre-owned vehicle demand; expects asset quality to improve
He also mentioned that Income Recognition and Asset Classification (IRAC) provision was lower than Ind AS provisions in the balance sheet of the company and he expects the provision requirement to decline. “As we move to September – that’s the timeframe given to us –we do not think there will be a big gap between the two because you will then align your customers to those repayments; there will still be some gap, but since we have sufficiently covered under Ind AS, we may not be required to make any additional provision as we reach that date,” said Iyer.
Watch the video for the full interview.
First Published: Feb 17, 2022 2:17 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Lok Sabha Election 2024: Phase 5 voting concludes with over 57% voter turnout, experts weigh in on key battles
May 20, 2024 11:07 PM
BJP holds meeting in Delhi as polling underway for 5th phase
May 20, 2024 4:21 PM
UP Police arrests man after viral videos shows him voting multiple times
May 20, 2024 2:18 PM