Poonawalla Finance debuts in digital lending space

Poonawala Finance has presence in Maharashtra, Karnataka, Gujarat, Madhya Pradesh and Telangana.

Poonawalla Finance, an NBFC and part of the $ 8.4-billion Cyrus Poonawalla Group, has made its debut in the digital lending space and within eight months of launch has reached lending of Rs 1,150 crore.

Headquartered in Pune, Poonawalla Finance was founded by Adar Poonawalla and Abhay Bhutada. Poonawalla Finance is aiming to become a leader in the small-ticket digital lending space in the country. Adar Poonawalla, chairman of Poonawalla Finance, said they had crossed the Rs 1,000 crore AUM milestone in a short period of time and will touch the Rs 1,500-crore AUM mark by March 2020. “We are looking to achieve organic growth by creating value propositions with innovative products and high-end technologies that would enable us to be the market leaders in this domain,” Poonawalla said. The Poonawallas own around 91% in the company while Abhay Bhutada as co-founder has a 9% stake in the company. Poonawalla Finance starts with Rs 850 crore capital.

“We have just raised Rs 250 crore from Kotak Mahindra NBFC and will be raising Rs 3,000 crore to Rs 3,500 crore in the next financial year,” Poonawalla Finance ED and CEO Bhutada said. There will be no challenge in raising funds for Poonawalla Finance, Bhutada said. They plan to go pan-India by next fiscal. In a market where NBFCs were struggling to raise funds and lend, they were able to disburse Rs 1,150 crore with a ticket size ranging from Rs 2 lakh to Rs 30 lakh and there were no delinquency reported, Bhutada said.

Poonawalla Finance is looking at the ‘under-served’ borrowers segment in India. “As we offer only short tenure loans, we will not face any kind of asset-liability mismatch while moving forward,” Bhutada said. The company started lending operations in April 2019 with a focus on the retail segment with small-ticket size products under personal loan, unsecured business loan, and professional loan category.

Poonawala Finance has presence in Maharashtra, Karnataka, Gujarat, Madhya Pradesh and Telangana. Lack of organised credit to MSMEs has limited the growth of entrepreneurship and Poonawalla Finance wants to fill this massive credit financing gap in the MSME sector through customised small-ticket loan offerings for their expansion and working capital requirements.

The current focus at the company was to build key leadership teams, customer acquisition strategies, collection infrastructure and risk management. Current products include business loan, personal loans, professional loans and consumer durable loans. They plan to diversify into co-branded credit cards, consumer durable loans, equipment financing and loan against the property; serving all the financial needs under one umbrella. Poonawalla Finance is promising lower rates of interest when compared to other NBFCs and zero prepayment charges.