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Corporate Report

Published on: Nov. 30, 2020, 8:34 a.m.
Capital India Finance marches towards inclusive growth
  • Bhanwala: our journey has just begun

By Arbind Gupta. Assistant Editor, Business India

An integrated financial services platform and an SME-focussed NBFC, Capital India Finance Ltd (CIFL) provides customised financial solutions to small and medium businesses for their growth and working capital requirements. Backed by investors like the Rs8,000-crore Dharampal Satyapal Group; Rs12,000-crore RJ Corp; and Rs1,500-crore Sudhir Power, CIFL has interest in a wide range of financial services. Promoted by Delhi-based entrepreneur S.K. Narvar, it partners new-age, local businesses and entrepreneurs with customised finance solutions.

The New Delhi-headquartered CIFL is also into home loans in the affordable segment through its subsidiary HFC, Capital India Home Loans. And, through its subsidiary RapiPay, a leading fin-tech player, it has been a pioneer in payment solutions and neo-banking. The company has also entered the forex business through its subsidiary, RapiMoney (RemitX).

In the short span of a little over a year, RapiPay, the flagship subsidiary of CIFL, has built up a retail network of 80,000 ‘RapiPay saathis’ across India. With offices in NCR, Mumbai, Kolkata and Bengaluru, the fin-tech entity has a presence in over 8,500 of the 19,100 pin codes in India. While being profitable at the transaction level, RapiPay has grown its transaction volume from Rs78 crore in Q1 2018-19 to Rs3,612 crore in Q2 2020-21. Backed by banking partners like ICICI Bank and Axis Bank and BC partners like Paytm and Airtel, it is looking to take the per annum transaction volume to Rs2.50 lakh crore in the next four-five years, providing basic banking services to the unbanked and underserved sections of the country.

Empowering individuals

RapiPay has drawn the attention of investors already. Some of the Series A investors are the Rana Talwar-led Sabre Capital, family offices of DLF Group, Dabur, Sheela Foam Group, the owners of Sleepwell brand, Motherson Sumi Systems, Puneet Dalmia (Dalmia Bharat Group) and Havells, as also Naresh Trehan, chairman & MD, Medanta Hospital, as an individual investor. These investors have together invested about Rs62 crore in RapiPay.

Though incorporated way back in 1994 as Bhilwara Tex-Fin Ltd, CIFL started afresh in 2017 when the new promoters/management took over the BSE-listed but almost non-performing entity and infused a fresh equity capital of Rs500 crore in it. The company, focussing on empowering individuals, SMEs and mid-corporates with bespoke financial solutions, has already built an AUM of Rs520 crore in a short span of just over two years and is all set to take it to Rs2,500-3,000 crore in the next three years. Having started its operations in the second half of 2017-18, the company has grown over four times in 2019-20, clocking revenues of Rs105 crore. It is now looking to maintain this momentum and is ramping up its activities. CIFL has already offered financial assistance to over 60 SMEs (ticket size: Rs1-5 crore).

“Despite being incorporated a long time back, we are starting the entire business from scratch under a new management and with a new identity,” says Harsh Kumar Bhanwala, 58, executive chairman, CIFL. “We have put in place a dedicated senior management team, with significant experience in banking, financial services, consultancy and infrastructure and the results are already showing, though the journey has only begun. We offer an integrated financial services platform and plan to take financial inclusion to the next level with targeted products that will serve the population in Tier II and Tier III cities and rural areas. Through RapiPay, we have already reached a significant merchant base and plan to build on it to enable last mile delivery of financial services. In addition to this, we are also rendering international remittance services with our recent venture RemitX,” he adds.

Bhanwala joined the company in August 2020, before which he was chairman, NABARD from December 2013 to May 2020. Prior to NABARD, he was managing director (1999 to 2005), Delhi State Co-operative Bank Ltd (DSCB). During his stay with NABARD and DSCB, Bhanwala led various initiatives related to financial inclusion, micro-finance, co-operative credit institutions, rural infrastructure project development and project appraisal related to agricultural projects.

A postgraduate in management from IIM, Ahmedabad, and a PhD holder, he was executive director and then CMD (2012-13), India Infrastructure Finance Co. As chief general manager, he led the credit enhancement, corporate planning and HRD initiatives at IIFCL.

His style of developing a credit enhancement initiative was a first-of-its-kind initiative in the country; it aimed at enabling the infrastructure projects to approach debt capital markets, substituting high-cost debt and simultaneously helping banks in freeing up their capital and managing the challenges of exposure and long tenure, which they faced in financing the infrastructure sector.

World class advisory service

“We aim to bring ‘digital first’ products in the financial services space, with a view to driving digitisation of all processes right from sourcing to disbursement,” says Keshav Porwal, 45, managing director, CIFL. “We also plan to drive the financial inclusion agenda to become number one in remittances and the PoS space. Furthermore, we look to innovate and develop a world-class, tech-enabled investment advisory service for people belonging to various classes, who lack a quality investment advisory.” A founding member of the company since November 2017, Porwal is responsible for formulating the organisation’s overall growth strategy and guiding its evolution into a reputed financial services institution.

A chartered accountant, Porwal is an industry veteran, with almost two decades of experience in the finance and real estate sector. He has successfully closed large, complex real estate transactions, involving leading developers across the country, as well as PE investments. He has worked across all aspects of real estate financing, ranging from risk management to new product launches. Porwal has also been involved in the restructuring and re-engineering of medium-sized enterprises in the auto and hospitality sectors. In previous positions, he has been with Kotak Mahindra Bank, ICICI Bank, ABN AMRO Bank, Société Générale and India Infoline.

Yogendra Kashyap, another core management person, heads CIFL’s fin-tech subsidiary, RapiPay, as managing director & CEO. He is a technocrat with about 30 years of experience in technology and nurturing new businesses. Through his initiatives, Kashyap has brought BFSI services to over one million touch points through India. He pioneered a number of technology-enabled initiatives of the government of India, before venturing into the digital wallet and money remittance businesses.

Reaching out to the last mile 

A crusader for bringing about e-governance in government organisations, he has worked relentlessly towards devising new solutions and technologies in the ITeS sector, thus impacting the last mile across the length and breadth of the country. With vast experience in the design and implementation of VLSI (very large-scale integration) circuits, Kashyap has identified the product hardware for RapiPay.

As part of the designing, collection and issuance of electoral roll and electoral identity cards, he could reach out to 80 million people of the country across various districts, primarily in northern and western India. He has spearheaded many successful projects, such as the usage of smart cards in government transport (impacting people in 70 districts), managing and improving the public distribution system (in five states) and the implementation of coastal ID cards (in 13 states, from West Bengal to Gujarat). Kashyap’s experience will be key to making RapiPay a success and innovating new products to reach out to the last mile, as he looks to redefine the payment systems in India through ‘RapiPay saathis’ – a B2B assisted model, providing basic banking services to the unbanked and underserved section of the country.

CIFL’s wholly-owned subsidiary, Capital India Home Loans, offers seamless loan solutions to home buyers (ticket size: Rs10-12 lakh). In less than a year, the HFC has built a loan book of about Rs100 crore, serving over 2,000 customers. The company, which looks to expand its book to over Rs500 crore in the next three years, has devised a strategy to tie up and co-lend with new age companies, which help it in expanding its reach and growing the book in a cost-efficient manner.

Vineet Saxena, CEO, Capital India Home Loans, is an astute banker and finance professional with two-and-a-half decades of experience in commercial and retail lending functions. An MBA in finance and marketing and an engineer, Saxena has worked with ICICI Bank, Barclays Bank, ABN AMRO Bank, GE Capital, Religare Finvest, Magma Fincorp and StarAgri Finance.

A new business line of CIFL, RapiMoney is an integrated foreign exchange service provider, offering comprehensive forex solutions to various customer segments. With a focus on providing end-to-end B2C forex solutions, leveraging technology, it started operations in September this year.

With all these initiatives in place, CIFL and its subsidiaries are gearing up to explore opportunities in the country’s financial services sector. The company has put in place a strong management team, which is expected to chalk out the desired strategies and action plans to drive growth, going forward. In a short span of time, the company’s business model has already generated a good deal of interest among the investor community as well.

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