“We are applying for licence with the banking regulator (Reserve Bank of India) and expect to start our NBFC soon," he said.
The company is also planning an initial public offering (IPO) in 18-24 months to provide an exit option to some of its investors, Sanghi added.
CarTrade is backed by Singapore government’s investment vehicle Temasek and private equity firm Warburg Pincus, among others.
It has already tied up with various banks and financial institutions to help car buyers, but the company wants to venture on its own sensing a big opportunity in the used vehicle financing business.
“We are putting together a team for the new venture,” Sanghi said.
According to its own estimates, the used vehicles market is worth around $30 billion in India, with almost 5.5 million cars — each averaging around ₹6 lakh — sold annually. “Only 5% of the market gets organised funding and that leaves a big opportunity to plug,” Sanghi said.
The company, which counts PE funds such as Warburg Pincus, Tiger Global, JP Morgan and March Capital as investors, raised $55 million led by Temasek in February 2017.
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