Piramal Finance has aggressive growth plans for FY27, including expansion in the gold and microfinance loan segments, Managing Director and CEO Jairam Sridharan tells Manju AB in an interview. Excerpts:
There are nascent signs of stress on the secured book of the company. Would you elaborate?
The stress is benign across all our product segments. But in a very early-stage observation, we are noticing that there is stress emerging among salaried employees in the IT sector. It is showing up in the mortgage loans, particularly from the southern markets like Chennai, Bengaluru and Hyderabad. There is nothing alarming about it yet, but these are signs which we have to watch out for a little more carefully. In our unsecured products, however, we do not see any stress.
Is gold lending going to become one of the main focus areas for you in FY27?
Yes, gold loan will be a focus area. It is a new product for us. But it is growing very well. We have disbursed Rs 6 crore of gold loans just in June.
We are planning to open around 200 gold loan branches across India during the fiscal. This is part of our second phase drive to expand the gold loan business.
We are also going to open about 50 to 60 branches in rural areas for accelerating our microfinance business. This will take our total branch network to about 900-1,000 by FY27.
Will you also look at some inorganic growth for gold loans?
We are open to both organic and inorganic growth. We are not evaluating any specific deal at this stage. But if we come across something attractive, we are open to buying.
How do you plan to expand in rural areas?
We are looking at expanding rural lending to villages where we will do microfinance loans before introducing other products. The rural network of our branches will be beefed up to achieve growth.
Fundraising plans during the year?
The board has given an enabling approval for raising up to Rs 4,000 crore during the year. It will be through equity shares, convertible securities, non-convertible debentures with warrants or other equity-linked instruments, subject to market conditions and regulatory and shareholder approvals. Funds will be used to fuel our growth plans.
Where did Q1 profitability come from?
We have seen all-round growth across loan segments. Our mortgage loans have grown 30% to Rs 61,199 crore, constituting 67% of our retail AUM. We have reduced our operational expenses-to-AUM by 57 basis points.