Financial services

Piramal Group paves the way for the growth of its financial services business

With the acquisition of debt-ridden DHFL, the Piramal Group has set a growth trajectory and is targeting a loan disbursement of around Rs 3,500 crore in the third quarter of this financial year.

Sharing the growth strategy with shareholders at Friday’s annual general meeting, Piramal Group Chairman Ajay Piramal said the financial services arm plans to further expand the branch network by adding 100 branches over the course of of exercise 23.

Piramal Finance seeks to expand its product line by launching new differentiated high yield products and new partnerships with fintech and consumer technology companies to acquire customers at scale and at low acquisition costs.

“With all these initiatives, we are on track to achieve retail loan disbursements of Rs 2,500-3,500 crore in Q3FY23, or 5-7 times pre-merger levels.

“With a scalable, technology-driven lending platform, significant firepower for organic growth as well as acquisitions, given our low financial services sector debt/equity at 2.7x and of considerable potential for value release (i.e. investments in Shriram), we believe we are well positioned to become one of the largest premium NBFCs in the years to come,” said said Piramal.

Gross non-performing assets (NPA) declined in FY22 to 3.4% from 4.1% in March 2021.

Last year Piramal Group acquired Dewan Housing Finance Corporation Ltd (DHFL).

This was the first resolution under the Bankruptcy and Insolvency Code (IBC) in the financial services industry.

On the life insurance business side, Piramal said: “Through the acquisition of DHFL, we have also acquired a 50% stake in Pramerica Life Insurance (JV with Prudential-US). company (solvency ratio of 404%), we aim to drive the growth of this business in the years to come”.