NEW DELHI: E-commerce platform for pre-owned vehicles CARS24 expects its non-banking finance business to grow by 80-100 percent in the ongoing fiscal, cashing in on robust demand for used cars, according to company Co-Founder & CMO Gajendra Jangid.
The company, which had acquired a non-banking financial company (NBFC) license in 2019, had clocked a revenue of Rs 75 crore in FY22 from the used-car financing vertical.
"With the acquisition of NBFC (license) we have started providing loans to the consumers.
Our penetration rate is more than 50 percent, almost one out of two cars we sell, we are (providing) finance to the consumer," Jangid told PTI.
He said at present, financing in the overall used-car segment is very low.
"The reason why we acquired the NBFC license was that financing for used cars in India is heavily under-penetrated.
"In new cars, around 75 percent of the cars get financed but in used-car, only 15 percent is financed because banks don't like the space very well for obvious reasons, because they don't know the value of the car precisely," Jangid said.
When the value of a used car is not known precisely, banks find it difficult to calculate risk, he said adding with the used-car market largely unorganised financing in the sector hasn't grown much.
Bullish on the NBFC business, he said it is expected to grow by 80-100 percent in FY23.
This will be on the back of CARS24 cashing in on the rising demand for used cars in the country.
"We are projecting the used car market will be at least 1.4 to 1.5 times of the new car market," he said adding the new car market is expected to close FY23 at around 36 lakh units while the used car market would be close to 50 lakh units.
The growing demand for used cars has increased with the COVID-19 pandemic further accelerating the need for personal mobility, he said, adding it helped the company increase its revenue.
The company's revenue from operations stood at Rs 5,136 crore in FY22 as compared to Rs 2,741 crore in FY21.