What is your expectation for 2018-19?
Things are starting to look better. However, occasionally, some external things happen. Next year, I hope we should clock 15 per cent growth. This year, demonetisation and the goods and services tax affected business. Further, overall credit off-take, which is very important, is absent. We think the interest rates are also hardening now, which means there is a little pick up in loans. When there is an increase in credit demand, we should see demand going up for our loans also.
How has the performance of the subsidiaries been and what are your expectations?
is doing well and we expect it to reach about Rs 14 billion (Rs 1,400 crore). Microfinance should reach about Rs 12 billion (Rs 1,200 crore). We were thinking of a diversification in our loan portfolio. We started the year with five per cent of other portfolios, which we are expecting to double to 10 per cent. Next year, we are targeting that loans other than gold loans should be 15 per cent of the total portfolio. This means that we are looking at other areas of growth also, whether it is home finance, microfinance or the Sri Lankan subsidiary. It is not derisking, but getting into other opportunities. There is nothing better than gold loans. The company has sufficient capital and headroom for more growth than this. However, we should target what we can achieve.
What are your plans for expanding into other lending businesses? Which are the segments you may look at?
The board always considers such options and, as and when good opportunities arise, we will certainly go ahead with it. We look at all options — from acquisitions to starting something greenfield. There are many other lending areas available for expansion. The board will discuss about taking a decision in the near future. There are opportunities in vehicle finance and personal loans. We will examine them. We have a big presence and branch name, which should help us in entering into these areas. We have 4,500 outlets and add around 150 branches net year-on-year.
What are the opportunities and challenges for the gold loan business in the near future?
India is a growing country and, as and when credit picks up, we are ready to grow. I think the opportunity is always there. The challenges are that we should not get surprises. Nothing has happened in the regulatory scenario in 2017 specific to NBFCs
or gold loans. We have a capital adequacy of 27 per cent and are not looking at fundraising other than some NCDs (Non-convertible debentures).