Piramal Finance to foray in gold loan and micro-loans this fiscal year

• Plans to expand branch network to 600 branches across 1,000 locations in Bharat markets
• Aim to reach AUM of 1.3 lakh crore by FY28 making it 70% retail - 30% whole AUM

Kochi, April 04, 2024: Piramal Finance, the wholly-owned subsidiary of Piramal Enterprises Ltd, plans to diversify its product portfolio with introduction of traditional gold loan business and unsecured microfinance loans this fiscal year. With this, the company will cater to the evolving customer needs and broaden its consumer finance focus. This strategic move marks a significant shift from its traditional real estate-driven business model.

Despite the associated risks, the company remains confident in its strong underwriting capabilities, ensuring effective management of these new ventures. This strategic move aligns with Piramal Finance's goal of transitioning towards a more balanced portfolio, with retail loans constituting a significant portion of its assets under management (AUM).

Piramal Finance is poised to introduce small-ticket loans, potentially less than Rs 10 lakh, utilizing assets such as small shops or properties as collateral. Recognizing the growth potential in this segment, the company aims to capitalize on emerging opportunities and expand its presence in the market. Although its current microfinance business is relatively small at ~Rs. 1,000 crore, compared to the company’s Rs. 70,823 crore of AUM, it remains a strategic focus area within the company's broader asset management portfolio.

The company has expanded its branch network to over 470, spread across 25 states, 625 districts, covering over 369 cities and towns across the country. Plans to further scale up the branch network by adding 100 more branches in FY2025, aiming for a robust network of 600 branches across 1,000 locations. This expansion aims to reach customers in tier-II, tier-III towns, and the outskirts of tier-I towns.

Retail business drives the total AUM, with the mix between retail and wholesale progressing rapidly towards the target of 70% retail and 30% wholesale by FY’28. The company aims to double its AUM to Rs. 1.2-1.3 lakh crore by FY’28.

Jairam Sridharan, MD, Piramal Finance said, "We are broadening our consumer finance focus, planning to add gold loans, micro business loans, and unsecured microfinance loans to our portfolio this fiscal. Despite the higher risks, we have the underwriting capabilities to originate them, reflecting our commitment to providing comprehensive solutions and fostering financial inclusion"

Piramal Finance’s innovation, coupled with the 'high touch' and 'high tech' strategy, has helped develop a multi-product retail lending to enhance its ability to serve the people of Bharat. The company offers an array of more than 13 loan products, including home loans, business loans, personal loans, used car loans, and more.