The Hindu Business Line : Apeejay Fin targets Rs 200-cr disbursements

APEEJAY Finance Group Ltd, which is exclusively engaged in car financing business, has set itself a disbursement target of Rs 200 crore in the current fiscal.

In 2002-03, the company disbursed Rs 123 crore on a pan-India basis. The company expects profit before tax of Rs 6.5 crore this year, up from Rs 4.25 crore recorded in 2002-03.

Stating this here, Mr Karan Paul, Director of Apeejay Finance Group Ltd, said the eastern zone would account for disbursements to the tune of Rs 70 crore, followed by Chennai and Bangalore who would together account for Rs 60 crore worth of disbursements. Mumbai and Delhi would account for Rs 40 crore and Rs 30 crore of disbursements, respectively.

Mr Paul said the company, which has been growing at a compounded annual rate of over 25 per cent for the past five years, was confining its operations to the A and B car segments. Seventy-five per cent of its portfolio was for financing new cars while used cars account for the balance 25 per cent. The disbursements were being made at an average return of 11-11.5 per cent per annum.

According to him, Apeejay Finance Group Ltd has recently-concluded a securitisation deal for Rs 20.43 crore through the pass through certificates (PTC) route. The cost of raising funds through the PTC route has been pegged at 6.78 per cent per annum. It was a par issue and the PTCs were categorised under two series, the A1 with an average maturity of 8.49 months and the A2 which has an average maturity of 14.40 months. Kotak Mahindra Bank has been chosen as the alternative service provider for the PTC issue.

Consequent to the PTC securitisation initiative, the average cost of funds for the company would come down to 7.5-8 per cent per annum. In 2002-03, Apeejay Finance's average cost of funds was 8.7 per cent per annum.

Mr Paul said the company had identified the securitisation route for faster generation of funds and for facilitating the company's growth.

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