‘We will open 35 Noodle House restaurants’

Dewan Housing Finance Corporation Ltd’s vice chairman and managing director Kapil Wadhawan, in a tête-à-tête with Ashish K Tiwari speaks about future plans for DHFL and Wadhawan Group’s other businesses. Excerpts

Dewan Housing recently picked up a minority stake in Wadhawan Food Retail, what motivated the move? Do you intend to increase the stake later?
The acquisition of 19.9% stake in Wadhawan Food Retail for Rs 5 crore was a decision taken by the DHFL board. The objective was to not only avail of the suitable opportunity for Dewan Housing to trade or off-load some of the stake in the market, which is unlikely, but also to provide sufficient opportunity for the investors to leverage both on DHFL and WFRL shares in the market.

Secondly, DHFL also gets to leverage on a strong WFRL’s distribution network for its housing finance business. And with both being low margin high volume businesses, we are optimistic about getting close to 80% of the consumer’s wallet by effectively exploiting this combination. The Wadhawan family will continue to retain the balance 80% stake in WFR. However, if at a later stage the board decides to increase the stake we will certainly look into it.

So you’ll use the food retail network for housing finance only? Are there any plans to expand the bouquet, what’s the time frame set for it?
We are predominantly engaged in housing finance business with a small presence in commercial, project financing and rental discounting. So with the current scheme of things, housing finance is what we intend to offer through the food retail network. But going forward, the group doesn’t rule out any possibilities of getting into other forms of financial services as well.

It is difficult to put a time-frame to this development but we are already exploring the possibilities of foraying into the insurance sector. Another area being seriously looked at is the consumer financing business other than housing finance. Now, whether DHFL will do it all by itself or will have a strategic partnership for these businesses is a decision we still have to arrive at. But yes, work on these developments is currently on.

Are you also planning to diversify the group’s retail foray beyond just food and grocery retailing?
Not everything will be pursued, but whatever we believe is the right format to have across various categories of retail will be explored. Thus, we will expand the retail bouquet into categories offering overall synergies with all our businesses and at the same time offers best return on equity to our investors.

To cite an example, we have already diversified in the home solutions retailing category with The Home Stores. With six stores already, there are definite plans to grow that format because we think there is huge growth potential (growing over 20% annually) in this category and obviously the synergies with the mortgage business. We are very seriously exploring a separate brand for the hypermarket model that will largely concentrate in the tier II and tier III towns. However, cannot talk much about its status at this stage.

How is the integration of your direct to home retailing with Sangam happening?
The process is currently going on and very clearly there is an element of stability to the operations. In fact, we are also looking at other lines of activity to generate revenues with this retailing model. We intend to incorporate a business-to-business (B2B) aspect which we thought was a missing link with the said business. So the process is currently on in that area and we should have a clearer picture on this initiative in the next six months or so.

What is the progress on your food and beverage (F&B) sector foray with Dish Hospitality?
Aurus, our flagship fine dine lounge brand, has already transcended and transformed the fine dining experience in Mumbai. We also have a state-of-the-art central kitchen with a capacity of over 10,000 meals a day along with a bakery that is the backbone supplier to retail chains across different spectrums.

Realising the need for innovative lifestyle experiences for Indian consumers we have got into a master license agreement with Jumeirah Group’s Jumeirah Branded Restaurants that will see us open 35 Noodle House restaurants in India. We should be opening three outlets before the end of this financial year. The cities being identified include Bangalore, Delhi and Mumbai.

We intend growing this line of business in the coming years. There are plans to put up our own format of quick service restaurants (QSRs) and a few other international master franchise arrangements for the Indian market. In fact, there would be a few good announcements to be made in the coming months.

What is the exact nature of business you do under the Wadhawan Holdings entity?
With its own resources and management team, this company incubates businesses and looks for opportunities to invest in new line businesses, sectors etc. Considering it’s a purely private entity, I’m not at the liberty to disclose further details including the financial resources already with this entity.