Piramal Retail Finance to foray into used-car, consumer and education finance

The company is targeting to grow the share of retail loans to about two-thirds of the book from 11% at present, and will also add other loan categories such as education loans and small business loans.

Piramal Retail Finance, a business entity under Piramal Capital and Housing Finance, on Thursday said it has made a foray into used-car financing and digital unsecured lending. The company is targeting to grow the share of retail loans to about two-thirds of the book from 11% at present, and will also add other loan categories such as education loans and small business loans.

The lender is entering into partnerships with various participants in the tech ecosystem. By Q4FY21, Piramal had gone live with two fintech partnerships – with ZestMoney in the purchase finance space and with CARS24 in the area of used-car financing. With these launches, Piramal Retail now offers seven products – affordable housing loans, mass affluent housing loans, loans against property (LAP), secured small business loans, purchase finance, unsecured loans and used-car loans.

Jairam Sridharan, chief executive officer, Piramal Retail Finance, said that the company has grown its product base quite significantly and is pivoting to a multi-product retail lending strategy rather than a purely home loans-driven business. “We are looking to be among the largest in the retail lending business in India but in a responsible way and in a way right for the customer, not necessarily driven by balance sheet growth intent,” he said.

During FY21, the lender has expanded its employee base to about 1,000 from 500, and it intends to double the number again in the next 12 months. Its presence has grown to 40 locations from 14 in FY21 and it is looking to add another 10 locations in three months. “Then the rest depends on what happens on one of the inorganic transactions that we are waiting on. We started the year with two products and now have grown into seven products and looking to add another four in the next twelve months,” Sridharan said.

The Piramal group’s overall lending book stands at about Rs 45,000 crore, of which Rs 5,000 crore, or 11%, is retail. The group has received the approval of the antitrust regulator to acquire Dewan Housing Finance’s (DHFL) loan book. That book has also got a substantial retail portion and depending on when the transaction happens and on how the accounting is done, the share of retail will grow to the mid-40s, Sridharan said.

“Our intent in the medium term is to grow retail to about two-thirds of our financial services business, with wholesale comprising the rest. Even though we have launched a lot of non-mortgage products, with the DHFL acquisition, which is almost entirely a mortgage business, our business is going to become very mortgage-heavy,” he said. That is why the company is keen to launch all its non-mortgage businesses now so that it has something to cross-sell to the large base of DHFL customers, he added.