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Magma Fincorp hopeful of getting insurance licence next year

28 December, 2011

The Kolkata-based retail finance player Magma Fincorp is hopeful of getting general insurance licence in the first half of the next year.
"We have already received R1 from Irda. Hopefully, R2 will be granted in the current fiscal and the final approval is likely in first half of the next year," Magma Fincorp Chief Financial Officer V Lakshmi Narasimhan told PTI here today.
There are three stages of approval that a company requires before entering into general insurance business. In the first stage or R1, Irda assesses the promoters and in the second stage or R2, the sectoral regulator investigates the business model of the company. In the final stage or R3, the watchdog checks into the constitution of the company.
The non-banking finance company and its promoters Celica Developers have entered into a joint venture with Germany's HDI Gerling to form Magma HDI General Insurance company. While domestic partners hold 37 per cent each in the company, HDI Gerling has 26 per cent interest in the venture.
Referring to growth in advances in the current fiscal, Narasimhan said the NBFC would stick to its earlier guidance of around 50 per cent growth in disbursement in FY 12.
"While our growth in disbursements was around 37 per cent in the first half of current fiscal, we hope to grow around 55 per cent in the second half," he said, adding Magma expects to disburse around Rs 8,000 crore in this fiscal.
Magma disbursed Rs 5,415-crore loan last financial year across segments like commercial vehicles, cars and utility vehicles, construction equipment, tractor and SMEs.
"While growth in commercial vehicle has been flat in the past two months, it is reasonable in the construction equipment finance segment. Tractor finance, car and utility vehicle segments are doing well," he said.