Mumbai, Mar 19: As part of a major diversification and expansion plan, Ashok Leyland Finance (ALF), a Hinduja group non-banking finance company with an asset base of Rs 1,800 crore, has decided to make a foray into consumer financing.A market leader in trucks and heavy vehicle finance with a transport portfolio of around Rs 1,700 crore, ALF is also planning to finance two-wheelers in a big way. Currently, it is in talks with a number of small- and medium-sized NBFCs with good asset portfolios for buying out their two-wheeler and consumer-finance assets.
This follows ALF's strategy to diversify into areas where it has no market presence and concentrate on consumer financing. ALF's transport portfolio accounts for 95 per cent of its business. The NBFC has decided to buy assets in the region of Rs 50-70 crore before June 1998. Speaking to Financial Express, N Sampath Kumar, general manager, ALF, said, "We want to expand our asset portfolio and become strong in two-wheeler finance and consumer financesector. We are currently evaluating assets of some of the companies which have approached us. Our liquidity position is quite good and as we are not equipped to handle the business on wholesale basis, we have decided to acquire these assets."
ALF has also securitised assets aggregating Rs 360 crore to CitiBank, GE Capital, Country Wide Finance and ICICI Credit. In the last five months, ALF has securitised assets worth Rs 150 crore with ICICI Credit. "We have done the maximum securitisation of hire-purchase receivables in terms of quantum of asset-backed securities," Kumar said.
ALF started securitisation as early as 1995. In the fiscal 1995, ALF securitised assets worth Rs 150 crore with CitiBank, followed by Rs 40 crore securitisation with GE Capital and Rs 20 crore with Countrywide Finance in 1996. In the last year, ALF has securitised assets worth Rs 150 crore with ICICI Credit. Currently, the company has concluded an asset securitisation deal worth Rs 150 crore with a multinational company.
"Aswe have created a large asset base, we are in a position to take the route of securitisation, which is one of the sources of raising resources," he said. ALF's total disbursement towards transport segment -- comprising trucks, cars and equipment and others for the fiscal 1997-98 -- is expected to cross Rs 1,100 crore as compared to Rs 680 crore last year.
ALF's disbursement rose by 82 per cent for the half year ended December 1997 at Rs 513 crore over Rs 288 crore in the corresponding period previous year. The company's hire-purchase disbursement during this period doubled to Rs 504 crore as against Rs 242 crore. The company's commercial vehicle disbursement stood at Rs 219 crore for the period ended December 1997, registering an increase of 64 per cent over the corresponding period previous year.
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