Upbeat on growth prospects, Lulu Financial Holdings to expand NBFC business in India

Bullish on growth prospects, Abu-Dhabi headquartered Lulu Financial Holdings is expanding its NBFC business in India by initially focusing on organic growth and is targeting to have a loan book size of Rs 100 crore by the end of March next year, according to a top company official.

Lulu Financial Holdings, which is mainly into financial services, has investments in the Indian sub-continent, GCC (Gulf Cooperation Council) and APAC (Asia Pacific) regions.

In India, the company owns the NBFC — Lulu Financial Services (India) Private Ltd — and Lulu Forex Private Ltd, India.
The NBFC (Non-Banking Financial Company) started operations last year and is in the process of expanding its business starting from the South, Lulu Financial Holdings Managing Director Adeeb Ahamed said.

“We have got into the NBFC space and it is very big in India…. It is a growth sector and we are targeting that as an area that we will be investing more… We have started expanding in Kerala and we will be taking it to other states as well,” he told PTI in a recent interview. Currently, the NBFC business is focusing on the SME (Small and Medium Enterprises) sector. “We are hoping to have a book size of Rs 100 crore by March 2023. It is the lending side,” Ahamed said

In a report released in March, rating agency Icra Ratings said the asset under management of NBFCs (retail) in India is expected to grow by 5-7 per cent in fiscal 2022 and by 8-10 per cent in fiscal 2023. According to Ahamed, initially, the company will look at organic growth for the NBFC vertical as it will provide an opportunity to be more grounded and hear out the consumers more closely.

“If it is inorganic, then it will be taking too much on the plate at this point of time. With such volatility in the market, we would rather like to grow organically. First two years of expansion will be fully organic,” he said.

About the regulatory framework in India, Ahamed said the country is a strong and growing market, and there have been a lot of changes.

“India is a very strong market but it is a growing market. One should not see it in comparison to other matured markets and start making strategies that have worked in other markets. We would always want to see India as a market of its own, which has its own character… a lot of things have changed in the last few decades,” he pointed out.

Emphasising that his group is not here for a valuation purpose but for the long-term, Ahamed said it had set up the forex division in 2012 and at that time, it did not have the interest to go to any other space.

“Today, a lot of regulations have been eased and it is more comfortable for international people like us to come. It encourages us to come and start deploying our own funds in the market,” he said. Lulu Financial Holdings has a presence in the hospitality space also but the core focus is the financial sector.

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