NBFC Gold Loan Indel Money in talks with PE Funds Eyes to raise Rs 400 Cr Capital

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As one of the few gold lending companies to launch a 2-year long-term gold lending program, Indel Money is striving to capture a significant market share by offering gold loans to long term

Mumbai-based gold loan NBFC Indel Money aims to double its gold loan portfolio by FY23 from that of FY21 on the back of sustained economic recovery, revival of economic activities , the subsequent growth in demand for gold loans and its accelerated expansion plan across India. Indel Money is also in talks with private equity (PE) funds to divest 15% of their stake as it charts a faster growth trajectory by entering new geographies this fiscal year and will raise funds from private equity investors in FY23 to accelerate its expansion across India targeting to raise around Rs 400 crore of capital in the next 2-3 years.

Indel Money’s gold loan portfolio as of March 31, 2021 stood at Rs. 309.97 crores. The company, which has a strong presence with 225 branches in Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Odisha and Pondicherry, is now planning to foray into Maharashtra, Goa and West Bengal in the first quarter of FY23 and Gujarat, Madhya Pradesh and Rajasthan by the fourth quarter of FY23 to establish a stronger market presence and increase disbursements.

The company currently has more than 225 branches in the south of the country and in Odisha. It made a foray into Odisha on January 22 with 25 branches. The broader goal is to increase the number of branches to more than 500 in 11 states by 2023 to meet unmet credit demand.

Indel Money increased its gold lending AUM to Rs.580 crore in FY21 from Rs. 336 crore in FY20. The company aims to grow the AUM to Rs.700 crore in FY22 and Rs.1,000 crore in FY23.

While explaining the company’s growth prospects, Umesh Mohanan, Executive Director and CEO of Indel Money, said, “In 2022, we will primarily focus on Tier 2 and Tier 3 markets to further expand our presence. By deploying digital capabilities, following the hub support model and leveraging the gold co-lending partnership with banks, our goal is to make our gold lending services accessible to a wider population. In this phase of growth, we will continue to focus on underserved rural and semi-urban areas.

As one of the few gold lending companies to launch a 2-year long-term gold lending program, Indel Money is striving to capture a significant market share by offering gold loans to term and the possibility of obtaining gold loans at the door. “We have designed our gold lending products by protecting clients and investors against the price volatility of the yellow metal. For our borrowers it is an easy flow of credit with more flexibility and for investors it is the comfort of liquidity and security,” Mohanan said.

Although the large untapped customer base has been the primary driver for expansion into Tier 2 and Tier 3 markets, the low levels of delinquency in these areas compared to metropolitan cities have actually bolstered the prospects for rural expansion in Tier 2 and Tier 3 markets. gold lending companies like Indel Money. Gold loan has become the fastest financing option available without any office or credit history check during the time of credit crunch.

Being the second largest consumer of gold, the country offers huge opportunities to grow the gold loan portfolio for gold lending companies by meeting unmet market demand. According to various estimates, arranged gold lending is currently valued at Rs. 4149 billion (Rs. 4.14 lakh crore) and is expected to grow at a CAGR of 19.5% over 3 years to reach Rs. 7557 billion (Rs. 7, 55 lakh crore) by FY2024.

With the economy regaining its growth momentum, demand for gold loans from individuals and the MSME sector is expected to increase further.

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