Gruh Finance may expand to TN, Kerala

Gruh Finance Ltd, a subsidiary of HDFC Ltd, is likely to enter three more states by the year 2010 increasing it presence from current five states to eight.

Talking to Business Standard, Sudhin Choksey, managing director of Gruh Finance Ltd, said, "Looking at our continuous growth plan for territory expansion, we might enter Chhattisgharh, Tamil Nadu and Kerala by 2010."

He further clarified that presently they are not taking steps for its territory expansion as it would like to focus on the states that it recently entered.

However, as per the company's adopted strategy it enters into the new states that are adjoining to the states where the company already has its operation. Under this strategy, the company may consider new territory that will be Chattisgharh, TN and Kerala.

Recently, Gruh Finance forayed into Rajasthan, Madhya Pradesh and Karnataka. The company first plans to consolidate it position in this three states by increasing its penetration into the rural and semi-urban areas. Gruh Finance has currently four offices in Rajasthan, six in MP and eight in Karnataka.

The company's penetration rate in Gujarat is 93 percent while in Maharashtra its 65 percent.

Presently, Gruh Finance wants to focus on increasing its penetration rate in Rajasthan, MP and Karnataka. "It is logical for our company as per our strategy to enter Chhattisgharh as it is adjoining to MP, while TN and Kerala adjacent to Karnataka," said Choksey. The company had a growth rate of 37 per cent for fiscal year ended March 31.

The company's fresh disbursement was Rs 474.21 crore for FY 2006-07 registering growth of 31.66 per cent. While loan book was Rs 1,376.59 crore that grew by 28.76 percent.

The gross non-performing assets (NPA) stood at 1.36 per cent (Rs 18.78 crore) which are fully provisioned. The company's net NPA is zero. Recently, the company raised Rs 59.625 crore through right issue. The right issue were issued at a ratio of 3:10.

Gruh Finance's profit after tax (PAT) was Rs 29.61 crore for the year-ended March 31, compared to Rs 21.68 crore the previous year.