Demo, GST & RERA has seen a massive shift from investor to a home buyer market in Delhi-NCR: Amit Mittal of eSilverbucks Consultants

It's been six months Amit Mittal opened eSilverbucks Consultants, a mortgage loan provider on immovable properties catering to the Delhi and the NCR, a Rs 36,000 crore market. Speaking to Mahesh Nayak of Business Today, Mittal that enjoys nearly 2 per cent of the market share in the NCR region says, the finance market for lending has improved since demonetization with the market changing from an investors market to genuine buyers market following a 20 to 30 per cent correction in prices since demonetization in the Delhi and NCR region.

A profitable company that generated revenues anywhere between Rs 2-3 crore in the first six months of operations, eSilverbucks, 80 per cent of the revenues comes from the offline business with a 90 per cent of the business is from homes loans (45 per cent) and loan against property (45 per cent), while 10 per cent of the business is from corporate finance business. Mittal says, "Market has shifted towards genuine buyer as Demo, GST and RERA has substantially brought down the black money usage in the home market in the Delhi and NCR region.

Similarly loan against property is also flourishing because small businesses are mortgaging their property to save their businesses due to working capital mismatch due to demonetization and GST."

Empanelled with over 40 banks and NBFCs, eSilverbucks from September 2017 is going aggressive on digital and social media marketing to capture more market share who feels there is lot of money available in the market and for everyone.

Edited Excerpts:

BT: How big is the business since the company's achievement of disbursing loan worth Rs.70 crore in just one month in March 2017?

Mittal: In terms of number the company is doing an average monthly disbursal of Rs 50 crore. Similarly, an average of 0.75 per cent of the loan disbursal is the revenue earned by the company. Thus, annually we can say that on the disbursal of Rs 600 crore the company is earning a commission of 4.5 crore per annum.

BT: Are you profitable?

Mittal: Yes, we are profitable from the first month of operation. We have a fixed monthly cost of Rs 20 lakh and our employee strength is around 55.

BT: Give the breakup of your revenue pie? How have you grown since inception in February 2017?

Mittal: We have disbursed over Rs 300 to 350 crore since our inception in February 2017 with an average disbursement of Rs 50 to 70 crore per month. We enjoy anywhere between 0.5 per cent to 1.5 per cent commission on home loans and loan against property. The corporate finance business doesn't earn us any revenue as no banks and NBFC  gives any commission and no customer is willing to give us any fee for arrange loans for them. Today 90 cent of our business comes from providing home loan and loan against property (LAP). While the remaining 10 per cent is from corporate finance business.

BT: What are the hurdles in getting finance from financial institutions and why is it? How are you reducing this gap?

Mittal: Despite many attempts Indian financial institutions has still not come out of the badge of red tapism. Arduous documentation, long and complex loan processing procedure and a plethora of hidden costs are among the evils of financial institutions. The major reason behind this is the administration has been a bit lethargic in up-skilling its work force. Till the time our banking machinery adopts a particular mechanism it turns obsolete as compared to the global standards. We have been trying to make every handy piece of information available to the users at just a click's distance.

Our EMI and Balance Transfer calculators help the applicants to assess their current financial position and plan the future course of action effectively. Besides this we constantly bid to impart awareness among the masses through our regular blogs on numerous financial hot topics.

BT: Who are your competitors in the market? Any plans to expand the business?

Mittal: Mortgage industry is quite a big industry and more than thousand companies are into existence in Delhi NCR itself. Still, there are 5-6 big players which are our competitors like, My Money Mantra and SMC Capital. The pie is expanding and we want to capture more market before thinking of expanding our reach in other markets.

BT: How big is the offline financing industry? What has been the growth in the last three years?

Mittal: Offline market is still emerging. Majority of the business is still offline which is why it throws huge opportunities of growth. The reason for online not growing is limited reach of internet that has not crossed the urban borders, rural population still finds it feasible to resort to offline financing sources. Second online industry has also faced the evils of spams and frauds which consolidate the future of the offline financial market. But it's improving and therefore we are increasing our spends to capture the online market.

Currently, the retail car market is around $650-700 billion and is expected to reach $1.3 trillion by 2020. Consequently, the car finance industry is also expected to increase by the 13.5 per cent. Similarly the real estate industry is also growing by 11.2 per cent which would definitely result in the growth of home loan industry especially after the government backed residential schemes.