Sachdeva, who has previously worked in the financial services sector, said eventually, NBFCs can help other companies in the group such as cement, steel or paint.
Sachdeva said that at present, the micro, small and medium enterprises that are customers of JSWOP are not served by the banking sector, and hence, the USD 22 billion JSW Group felt the need to enter the space.
He said JSWOP will invest around Rs 350-400 crore in NBFCs over the next two years, and this is a part of a total capital infusion plan of $4,000 million for the e-commerce business by FY27.
Sachdeva said, “It will be only e-commerce customers who will get financing. We are creating a captive (NBFC). It is part of e-commerce business, it is not an independently marketed company.”
The group has already incorporated the financial services company within JSWOP and named it as JSW One Finance Limited, he said, adding that the company would approach reserve Bank of India The license to operate as a non-deposit taking NBFC is expected in the last quarter of FY13, and is expected to get regulatory approval in 7-9 months thereafter.
“On the credit front, if we have to expand it to JSW Group at some point, we will be (open). This will require more capital,” he said, adding that this is a first foray into financial services. Group location.
It may be noted that practically every large conglomerate of the size of JSW Group has an NBFC-branch that caters to the financial requirements of the supply chains provided by individual companies in different sectors, while many In cases, such NBFCs have started going out independently. In the market as well as for non-captive business.
When asked about JSW Group’s decision to keep the business in a new company like JSWOP and not take it to the group level or any other big company, Sachdeva said, “It’s the digital capability that the platform provides, it’s the data.” What the platform is capturing is what is driving the (JSW) group to think that it is possible to do it this way. That is why all these businesses have been put under JSW One,” he said.
Sachdeva said NBFCs will properly value risk, but short-term (60-90 days) purchase finance will not chase returns while disbursing loans as the primary objective is to help increase the throughput of the overall e-commerce business. .
When asked about the threat of non-performing assets from financing small businesses in the infrastructure sector, Sachdeva expressed confidence that clarity on customer understanding, data processing, movement of goods across the entire value chain would help in this.
Sachdeva said that the NBFC will have 200 people working for this and efforts are already underway to build the team and also the technology stack which will be the core of the operations.
JSWOP will invest up to Rs 200 crore in the logistics side, Sachdeva said, adding that other pillars of service centers will also require investment in real estate and machinery, but declined to share numbers.
The company is currently running at an annual rate of Rs 1,400 crore. gross market value Sachdeva said that the GMV of goods sold on the platform will be Rs 3,000 crore by March 2023.
Sachdeva said the company aims to have a GMV of USD 1 billion on the platform in the next financial year, after which it will start looking for private equity investors. Weapon.
Sachdeva said it aims to start making profits and recording profits by FY27, at which time it is targeting to have a GMV of USD 5 billion on the platform.
Other major infrastructure players, especially Birla and L&T, have plans or are already operating dedicated e-commerce platforms. Sachdeva said that the objective of JSWOP is not to increase profit margins but to increase the overall throughput for the companies and added that it will never disrupt the existing distribution channels of each company.
Currently, around 80 per cent of the total sales on the platform are related to the group’s products, he said, adding that a significant portion of the sales are through distributors who are on the platform.
He said JSWOP is currently serving B2B customers in Tamil Nadu, Maharashtra, Karnataka and Telangana, and will move to Gujarat and the National Capital Region in the second half of the financial year.