Rural reach will help us expand in used-vehicle biz: Umesh Revankar

Maximum loan growth will come from the rural market in future, says Umesh Revankar, CEO & MD, Shriram Transport Finance Co Ltd. In an interview with Swati Khandelwal, he also highlighted the ongoing stress in the NBFC sector and expects demand for vehicles to pick up by August-September on hope of a normal monsoon.

Edited excerpts 

What are the key highlights of the fourth quarter results? Also, talk about the loan growth and segment-wise performance? 

The disbursement in the fourth quarter increased by 25% on a sequential basis. Assets under management (AUM) for the full year increased 8.54% and stands at over Rs 1.04 lakh crore against Rs 96,260 crore. When it comes to loan growth, the rural market was the biggest contributor and I think the rural market will be the maximum contributor in future as well. 

On the ongoing liquidity situation of the NBFC sector, provide a time by when the sector will come out of the problems?

When it comes to funds, in April 2019, we raised US bonds of $500 million. Thus, funds are available in our company. We have retail NCD plans and retail NCD funds will be raised by June 2019. So, challenges related to funds are not visible. 

Do you think the ongoing slowdown in the auto sector, which has seen higher inventory levels, will have any impact on your business?

If you have a look at the sales of the new vehicles than you will find that there was a decline in sales of new vehicles for the last six months. In addition, there is a slowdown in the real estate and infrastructure sector. Probably, people are also postponing their purchasing plans due to elections. I feel demand in sales and government infrastructure will go up as soon as the election results are announced. Secondly, the demand will also pick up due to good monsoon. That is why I feel that demand will pick up and be back to normal by August-September. 

What is your strategy to cater to the used vehicle segment?

Our total branch network stands at 2,545. And, the business expansion will depend on the rural reach that will be created as reach plays an important role in the used-vehicle segment, which helps in bringing new business. I think that our reach is quite good in the segment.