Tata Cap gets Rs 2500 crore from Tata Sons in FY19

Tata Cap gets Rs 2500 crore from Tata Sons in FY19
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Mumbai, Mar 7: Tata Capital has received a Rs 2500-crore capital infusion from its parent Tata Sons in FY19 to pursue growth at a time when rivals are facing distress. While half of this amount was received in the quarter ended September 2018, the balance was received in February 2019.
The fresh investment is expected to help Tata Capital de-leverage and expand its lending business, where it is sees an opportunity to grow market share. The company provides loans to individuals and businesses through its subsidiaries — Tata Capital Financial Services, Tata Capital Housing Finance and Tata Cleantech.
Tata Capital’s chief operating officer (commercial and SME business) Sarosh Amaria said the company has developed a digital lending platform because of which growth in disbursement value is more than 100% for low-ticket loans to small and medium enterprises (SMEs). Digitally, SME clients are served up to Rs 2 crore with an average ticket size of Rs 75 lakh. “We are looking to quickly grow the low-ticket business to over Rs 1,000 crore during FY20,” he said.
Financial services is an area where the conglomerate feels that the Tata brand is under-leveraged. The $111-billion Tata group is not among the top financial services players in the country. The conglomerate believes that there’s a big opportunity for a household name like Tata, especially when the financial services sector is battling a crisis.
The group wants to tap into its huge workforce, large network of vendors, dealers and customers to boost its financial services business. Though Tata Group employs more than 7 lakh people and has 100 companies in its fold, Tata Capital doesn’t even cover half of these.
According to Amaria, the company follows a strategy of funding channel partners of large corporates — small businesses that either sell to large companies or distribute products from large businesses. In January 2019 alone, Tata Capital has on-boarded more than 40% of its channel finance customers through the digital platform.