500 ALF units to be IndusInd retail fronts

Around 500 business locations of Ashok Leyland Finance (ALF) will continue to operate as the retail asset division of IndusInd Bank following a merger between the two.

ALF and the new generation private sector bank are part of the transnational conglomerate Hinduja Group.

S Nagarajan, managing director, ALF, told Business Standard, " We have made a proposal to the RBI to convert 140 full-fledged branches of ALF to IndusInd Bank's branches and are awaiting its approval. The other ALF business locations will continue to be direct marketing associate outfits of the retail assets' division of IndusInd Bank."

Nagarajan said that as the non banking finance company's activities and the bank's business operations are mutually exclusive, the merger would help the retail portfolio of the bank to grow by 40 per cent. IndusInd Bank has about 57 branches throughout the country.

The company has 644 business location of which 166 are full-fledged branches covering all the states across India. ALFIN services solutions a small subsidiary of ALF, manages 478 offices that provide credit for small ticket size.

ALF, started in 1982 and promoted by Ashok Leyland, finances commercial vehicles, cars, multi utility vehicles, construction equipment and two wheelers.

The total disbursements had reported a growth of 45.55 per cent to Rs 2703 crore for the year ending March 31, 2004. It interesting to note that disbursements to other vehicles jumped by 217.6 per cent while disbursements to Ashok Leyland vehicles grew only by 26.31 per cent.

Other vehicles include light commercial vehicles, three wheelers and tippers. Disbursements to construction equipment showed no growth while the two wheeler segment grew by 53.89 per cent to Rs 454 crore.

ALF's profit after tax was Rs. 39.61 crore for nine months ending December 31, 2003 compared to Rs 33.89 crore during the corresponding period last year reporting a growth of 17 per cent.

The merger of ALF with IndusInd Bank is effective from 1 April, 2003 and hence the annual results of the company for the financial year 2003-04 will be reported in a consolidated manner with that of IndusInd Bank.

The board of directors had recommended a ratio of nine equity shares of IndusInd Bank for every four held, for the shareholders of Ashok Leyland Finance.