Jairam Sridharan, managing director and CEO of Piramal Finance, tells Kshipra Petkar in an interview that the company is targeting a sharp expansion in retail AUM, improved profitability and deeper product diversification. Experts:
What are the focus areas for this fiscal and FY27?
The continued growth in assets under management (AUM) at about 25%, improvement of profitability from roughly 1.9% ROA in the December quarter to roughly 3% over the coming couple of years, and expansion of products. We have been talking about increasing our presence in the gold and microfinance businesses.
When is retail AUM expected to touch Rs 1 lakh crore?
We are working towards getting to Rs 1 lakh crore in Q4.
Which areas would be contributing to the retail segment growth?
Our core businesses – housing and loan against property – will obviously grow, but we want to expand our unsecured book a lot. We are starting gold and microfinance businesses from the scratch, so we should see good growth here as well.
Expected share of gold and microfinance businesses in total retail?
Let’s say we touch retail AUM of Rs 1.5 lakh crore in a couple of years, then we are talking about a Rs 15,000-crore book between them.
Any branch expansion plans?
We will open 100 branches in January-March. Of these, about 20 will be gold branches, 25 will be full service branches, and about 55 will be microfinance-specific ones.
What is your guidance on the cost of funds?
The transmission of the Reserve Bank of India’s rate cuts has not happened fully yet. I expect more transmission to happen in the next two quarters. I expect another 25-bps reduction in our cost of funds purely based on RBI rate cuts, and the recent ratings upgrade that we have received.