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Mumbai: Tata Capital, the financial services arm of the $100-billion Tata Group, plans to add more lending products, expand business within the group, and tap new sources of funding, such as masala bonds and non-convertible debentures (NCDs), to diversify its balance sheet, CEO Rajiv Sabharwal said in an interview.
“Due to the volatilities facing the NBFC industry, we have seen a 20 to 30 basis points increase in the cost of funds.
The fact that we sold NCDs recently has helped us immensely,” Sabharwal told ET.
“We want to diversify our funding sources, and the next NCD will not take 9 years.
It could happen before the end of the fiscal.”
Masala bonds and ECBs would be the tools Tata Capital would use to diversify its funding pool.
Last month, it raised Rs 3,500 crore by selling its first NCD in almost a decade.
The NCD issue had hit the market just before NBFCs began to feel the liquidity squeeze.
The revenue-raising agenda includes a planned revival of the company’s wealth management business and increasing the NBFC’s exposure to vendors and employees in the group.
That will complement group chairman N Chandrasekaran’s ‘One Tata’ approach, which aims to synchronise businesses within the salt-totech conglomerate.
“Doing business within the Tata Group is an opportunity whose potential we have not yet tapped to the fullest.
We think we have the potential to substantially increase our exposure to vendors, customers and employees within the group,” Sabharwal said.
“This could be supply chain, vendor financing, lending to small companies that are the group’s clients, or even providing consumer finance to employees of the group.”
The Tata Group has 100 companies and Tata Capital presently touches only about 40-odd.
It is this business opportunity that Sabharwal, a career banker and former executive director with ICICI Bank, wants to exploit.
“Currently, retail lending, housing finance, vendor financing, loan against property and SME loans dominate our book.
We want to make it more granular and have multiple engines of growth," said Sabharwal, who took over as CEO in April.
