Pune-based billionaire Cyrus Poonawalla, estimated to have a net worth of $8.4 billion, is well-known for his vaccine business from flagship Serum Institute of India, horse farms, fancy cars and some real estate interests in and around Pune. But not many know the Poonawallas entered into a new business Poonawalla Finance, a digital lending Non-Banking Finance Company (NBFC) started by his son Adar Poonawalla, in April this year.
Poonawalla Finance today said it has achieved a milestone by crossing Rs 1,000 crore assets under management (AUM) in November within just eight months since its inception. Mainly targeted at MSMEs that face cash crunch for expansion and working capital requirements, the firm claims to offer loans at lesser rates of interest compared to other NBFCs with small ticket size loans under business loans, personal loan, professional loan and consumer durable loans.
The products range between Rs 1 lakh and Rs 30 lakh with an average loan size of around Rs 10 lakh. The company now has presence in Maharashtra, Karnataka, Gujarat, Madhya Pradesh, and Telangana. Poonawalla Finance claims it follows a stringent credit risk process, with data analytics and AI-powered digital tools, to evaluate 1000-plus parameters from more than 30 data sources involving pre-approval scrutiny. It also utilises non-traditional sources of information such as customer profiling, cash-flows, GST analysis, business model, social check and personal discussions with promoter for credit underwriting instead of relying on security and collateral.
"Our endeavour is to touch Rs 1500 crore AUM by March 2020," said Adar Poonawalla, Chairman of Poonawalla Finance. According to CA Abhay Bhutada, Executive Director and CEO of Poonawalla Finance, the current focus is on building key leadership teams, customer acquisition strategies, collection infrastructure and risk management. "Since we offer only short tenure loans, we will not face any kind of asset-liability mismatch while moving forward," he said.
Poonawalla Finance is also planning to launch new products such as co-branded credit cards, consumer durable loans, equipment financing and loan against the property, with a view to offer all the financial needs under one umbrella.
Another billionaire who entered lending business in a large scale was Ajay Piramal, who sold off his pharmaceutical formulation business in 2010 to Abbott for a record $3.72 billion. Today financial services is the largest business for his flagship Piramal Enterprises, which is part of the Piramal Group which is valued at over $10 billion.