Piramal Enterprises aiming to increase AUM to Rs 1 trillion in 4 years

Two-thirds of AUM book to be from consumer business, says Piramal Finance MD

Piramal Enterprises Limited aims to increase its assets under management to around Rs 1 trillion within four years, with the consumer business seen rising to Rs 70,000 crore from around Rs 25,000 crore at present, Piramal Capital and Housing Finance MD Jairam Sridharan said.

Piramal Capital & Housing Finance is a wholly owned subsidiary of Piramal Enterprises Limited.

“From an AUM standpoint, our stated goal to the market is that in the medium term -four years or thereabouts, at an overall Piramal level, we’ve said that we want to be a book of a little over Rs 1 trillion with about two-thirds of that coming from consumer business, which means that we will go from where we are, which is about Rs 24,000-25,000 crores (on the retail business) to something like Rs 70,000 crores over the next three years,” Sridharan said at an event.

In November 2022, Piramal Enterprises said that its total assets under management were Rs 63,780 crore.

Piramal Enterprises’ retail loan book at present is Rs 24,872 crores, having grown more than four-and-a-half times from the levels that existed before the company’s merger with Dewan Housing Finance in September 2021. Wholesale lending accounted for Rs 38,908 crore.

Sridharan stated the company’s goals at the launch of a campaign focusing on credit needs of the unserved and underserved sections of society. The company plans to focus on budget-conscious customers as well as medium and small businesses in tier-2 and tier-3 towns, he said.

A key aspect of the new campaign is to look past documentation as the only method to assess creditworthiness, he said.

“The underwriting process is of course very different. Here (for the unserved and underserved) it’s a little more intensive. The tech integration is also a little different because here some of the regular tech integration doesn’t work,” he said.

He said it was possible to estimate the income of salaried individuals through a tie-up with the Employees Provident Fund Organisation (EPFO) and finding out about their PF credits, for instance. But it was different for the unserved and underserved. “There is no such thing in this population. We have put together a lot of people as well as a lot of internal processes to underwrite,” he said.

Providing an estimate of the scale of the new focus area, Sridharan said the segment could form around 25-30 per cent of the housing market from an AUM standpoint.

“Of the roughly Rs 1 trillion book that we have spoken about, around two-thirds is going to be consumer business, which is all the business that is directed towards individual or MSME borrowers. Within that, this customer segment will be the vast majority,” he said.

Speaking about the company’s plans to invest in technology and analytics – Piramal launched an innovation lab in Bengaluru – Sridharan said the firm had tied up with multiple data service providers, who would help it obtain information about segments of the population for whom structured data was not readily available.

“You need to triangulate from multiple sources… there are a lot of emerging data gatherers who are coming up in the market who are able to come up with slightly oblique data which has a little bit of say into the credit-worthiness of this individual,” he said.