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2024-09-29T10:13:34.611Z

99.99% people don’t even know the name of this fintech giant💰💰 How would they? They know it as India’s No.1 carmaker - Maruti Suzuki 😅 And this is a DATA deepdive on the beast, which hardly anyone knows! .. Basically, it’s a biz unit called Maruti Suzuki Smart Finance (MSSF). It was founded in December FY21, as a car loans marketplace with a total of 15 banks and NBFCs on board (now 26). And within a year it simply rocked everything up. And it has been growing big on steroids ever since, all under the radar of the media’s lens. But, enough this-that. Let’s dive into data! .. Just look at the disbursals. FY22: Rs 17.5k crore FY23: Rs 34.1k crore (Up 94%) FY24: Rs 45.5k crore (Up 33%) And, while this has happened, with Maruti Suzuki’s move towards SUVs driving up avg car prices, MSSF has also seen the avg loan size go up in a big way, from Rs 5.6L to Rs 7.2L. This has resulted in a big ancillary business line for India’s No.1 automaker, which earns a loan distribution income on every loan disbursed via those 26 lending partners. .. But, how big is it? How much does it earn? Going by the industry standards, on each of these loans it earns anywhere between 2-5% of the loan value as loan distribution income. Means, that in FY24 alone it earned anywhere between Rs 900-2.2k crore via MSSF. That makes it one of the largest fintech in operation in India 🙏🙏 .. Betting on the same, Maruti Suzuki is also doubling down, getting its dealerships to pitch more and more of its car buyers to avail loans via its fintech platform than from outside. They tell car buyers, this will lead to minimum hassle, and quick loan disbursal, all without any processing fee. And ask any car buyer: That’s exactly what they want! And in return, the dealerships get a commission from what Maruti Suzuki earns from the lenders. .. Result? Just look at the number of Maruti Suzuki car buyers who bought via a loan from MSSF. FY22: 23% FY23: 33% FY24: 37% .. At this scale and growth rate, this immensely high-margin fintech business supported by Maruti Suzuki’s massive dealership network is simply too attractive 🚀🚀 And who knows, a few years down, we may see MSSF being allowed to also lend to one purchasing cars from other companies - which will unlock further growth. This could be a separate IPO-worthy story, which could help unlock significant value for Maruti Suzuki shareholders! That’s why I find it amusing that hardly anyone in business media has covered this beast of a business. Did you know this?

Boyella Pavan Kumar Reddy

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