GE Commercial Finance, the business-to-business financial services unit of General Electric, is looking at investing up to Rs 1,000 crore ($222m) in the mid-market segment in India.
The non-banking finance company is also looking at the business of dip financing - buying out non-performing assets from asset reconstruction companies - besides focusing more on aircraft financing.
The company plans to finance corporates with a turnover between Rs 200 and 400 crore in the mid-market segment. Anil Chawla, CEO, GE Commercial Finance, India and South East Asia said, "We have made a separate team to focus on this sector. As compared to banks which finance on a cash flow basis model, GE finances on a mix of equipment-backed and cash flow bases. Our comfort in providing asset backed financing has increased on the back of the Securitisation Bill. The focus is on the auto, pharma and captive power sectors. We have qualified people who can estimate the value of the equipment at the end of the period."
The company finances through the operating lease method, whereby GE takes over the risk of the equipment while the borrower pays the rentals.
The borrower can use the equipment for a particular period of time and once the tenure is over, it can lease it again or go in for new equipment. "In the case of medical equipment, we also take care of servicing. Once we have tie-ups with vendors in this market, we can also service the equipment depending on the agreement," said Mr Chawla.
The company is also looking at other areas like corporate aircraft financing, commercial aircraft financing, ship financing, healthcare financial services and also dip or fatigue financing.
"If the company is good and the projects are viable, we will buy out debts from the asset reconstruction companies. The debts of these companies would be rejigged. However, it is dependant on government clarifications," added Mr Chawla. GE has invested around $2-3bn in this market.
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