IndoStar Capital flags off its vehicle finance headquarters in Chennai

“Unlike other promoter-led NBFCs, we are institutionally-owned,” said R Sridhar, Executive VC-CEO, IndoStar, noting that the presence of globally-acclaimed Everstone, Goldman Sachs, ACPI, CDI, besides a few employees as stakeholders, lent the NBFC a distinct edge. Private Equity ownership model, he opined, were few and IndoStar was privileged to adopt this in the B2B lending segment.

With a lending of over Rs 20,000 cr to its credit, the company’s collection has been good. It has serviced Rs 4,000 crore in the corporate side and Rs 1,000 in the retail segment. As on 30th September 2017, the company had a net worth of Rs 2023 Crore. The company offers customised financial services to meet specific customer requirements in the form of structured term finance to corporates, Loan Against Property (LAP) to SMEs, affordable home financing, retail home financing and vehicle home financing.

Leveraging his 30- year expertise in vehicle finance space, thanks to his stint with the city-based Shriram Group, Sridhar said IndoStar had decided to “strategically have the vehicle finance head-quarters in Chennai” considering the auto hub status of the city. Also, when it comes to truck finance, auto and auto components, the eco-system provided the opportunity to flourish in the newly-entered space.

Having an aspiration to reach Rs 50,000 crore in five years, the company is betting on the vehicle finance business to drive the growth trajectory. It is anticipating to reverse the current 80:20 equation between corporate and retail lending by then. IndoStar posted a profit after tax of Rs 210 crore for the year ended Mar 2017.

Sridhar said the company intends to set up 6 branches in the city and take its branching network to 50 in Tamil Nadu, given the presence of a big market for commercial vehicles (CVs). It is hoping to tap the potential of new and used CVs, passenger vehicles and some of the two-wheeler segment. As part of its growth strategy, the company has plans to expand into fifteen states including Tamil Nadu, Karnataka, Kerala, Andhra Pradesh.

“We are looking at customers, who have the entrepreneurial drive and aspiration trying to access capital at affordable price so that they can reach the next level of growth,” he said, adding their target was in the 25 to 40-year age bracket and the middle segment which rules out the fleet owners or the first-time users (FTUs) at the bottom of the pyramid.