As per your guidance, your vehicle finance target disbursement growth was 15%, but we did see a decline in that segment. What are your strategies to achieve the target and can we expect any changes in that market?Arul Selvan: Market had been very low in the first quarter and primarily we always try to look at AUM growth rather than independent disbursement growth because that is what results in the interest income. We have achieved a disbursement growth of around 7% in vehicle finance and the AUM growth has been around 18%. So, we are well within the target and compared to peers in the current quarter, our performance on both disbursement and AUM has been fairly good.
In your home loan segment, your assets under management (AUM) have grown 33% year-on-year despite a slight decline in disbursement that we have seen. Now with the management guiding for 30% AUM growth and only 15% AUM growth in FY26, could you elaborate on the key factors in terms of what is at play here in terms of these growth numbers?Arul Selvan: The AUM growth has been fairly robust and the disbursement growth in this segment has been lower or moderate in certain geographies where we have a larger presence like Karnataka. Registration processes have changed in the home buying mechanism, and that has resulted in the slower disbursement in these geographies. That is why we are seeing a flattish disbursement growth. We are confident this would go up in the coming quarters and for the full year, we continue to maintain the same target levels.
Given the 24% year-on-year growth in your total AUM which is already at the upper end of your earlier guidance of 20% to 25%, what is your revised outlook or guidance for AUM growth and what will be the key drivers to support that trajectory?Arul Selvan: We still maintain the target for the full year in the 20-25% level of AUM growth. Post monsoons, we will see the growth picking up in the Q3 and Q4 when the festival season starts in the vehicle finance as well as the home loan business. We are not changing this target currently. We will stick to this target unless there are large implications of monsoons being not as per projections.
Could you throw some light on the company’s borrowing plans for the remaining three quarters of this financial year?Arul Selvan: Borrowing is a continuous effort because we need to keep borrowing to repay our existing loans as well as for fuelling the new development with regard to the disbursement and the AUM growth. Approximately, we borrow between Rs 7,000 crore and Rs 10,000 crore every month, and so that plan will continue. We have taken additional resolutions to enhance our borrowings in the coming year. So, we will do these borrowings. We are looking at various avenues of borrowing in the year like ECBs, the CPs, as well as NCDs, apart from our regular mainstay borrowing or bank borrowings.
What about your gold loan business? How has that been performing considering it is the newest addition to your bouquet?Arul Selvan: Yes, we just started. End of June, we had around 75 branches and now we will be scaling it up to 120 branches by Q2 and it is a very early stage, but it is a business where we are confident that since the asset is secured and it is an appreciating asset and with the new guidelines from RBI, there will be a level playing field among players. We are confident that we can scale up this business as we move into the future years.
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