Career Point Surges 20% on RBI's NBFC Nod

NDTV Profit Desk

15 Dec 2014, 04:01 PM IST

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Career Point shares zoomed 20 per cent on Monday to a day-high of Rs 143.10 on the NSE, after it informed the stock exchanges that the Reserve Bank of India or RBI had granted the company's wholly owned subsidiary Srajan Capital Limited a certificate "to commence/carry on business of non banking financial institution (NBFC)".

The stock outperformed the broader Nifty and the Sensex which were in the red.

"Srajan Capital is focussed on educational loans, so initially the focus is on providing educational loan to resident and educational institutions for setting up infrastructure and soft infrastructure. So that is initially the key focus for Srajan Capital," Pramod Maheshwari, managing director and CEO, Career Point Infosystems told NDTV. (Watch Video)

The Kota-based company plans to infuse Rs 10 crore in January-March quarter and by 2015-16, it expects Srajan Capital's loan portfolio at close to Rs 50 crore. The NBFC operations are expected to start by middle of January, Mr Maheshwari said.

It said the initial focus will be on Rajasthan - primarily Kota - and then they would look at spreading their network outside Rajasthan. Career Point runs coaching centres for competitive exams, universities and schools.

For the current year, it has got 18,000 enrolments for year-long classroom programs and 25,000 for various programs cumulatively, Mr Maheshwari said. Enrolments are seen growing by 25 per cent, next year, he added.

There is robust demand for education loans and nearly 50 per cent of the students who join higher education look at availing them, Career Point said.

"The problem with majority of large financial institutions is that the process is pretty slow. So when a student approaches bank or other institutions for educational loan they take lot of time and there is a deadline for fee deposition with institutions so that creates lot of issues with respect to that, wherein we being into this business, we can disburse funds quickly, so we see a large opportunity," Mr Maheshwari said.