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Shriram Group is all set to enter the wealth management business in the next financial year while it awaits regulatory approval from the Reserve Bank of India (RBI) to venture into asset reconstruction activities, a top company official said.
The Chennai-based conglomerate will launch its wealth management business through a subsidiary Shriram Credit, which is a subsidiary of Shriram Capital. Asset reconstruction will come under Shriram Capital.
“Wealth management is something which we are planning during the next financial year. On the other hand, we have made an application for asset reconstruction and we are yet to get a go-ahead from the Reserve Bank of India (RBI),” Umesh Revankar, executive vice-chairman of Shriram Finance, told Business Standard.
This comes at a time when Shriram Finance Ltd, one of the largest retail non-banking financial companies in India, is targeting a growth of 20 per cent in the company’s assets under management (AUM) during the current financial year against 15 per cent guidance. For FY25, it has also given a guidance of 15 per cent growth.
“We have been growing at 20 per cent now and wish to complete this year at 20 per cent AUM growth for the full year. Next financial year, we would like to go back on our guidance of 15 per cent, because there is going to be uncertainty during the first quarter because of the likelihood of elections,” Revankar added.
During the third quarter of FY24, the company’s AUM was seen at Rs 2.14 trillion, compared to Rs 1.77 trillion during the October-December quarter in FY-23, up by 21 per cent. Shriram Finance has posted a marginal rise of 4 per cent in consolidated net profit to Rs 1,873.59 crore during the third quarter of the current financial year compared to Rs 1,801.66 crore during the same period in FY23.
“We have been growing at around 13 per cent Y-o-Y in commercial vehicles. We expect it to grow anywhere between 12-15 per cent. Passenger vehicles were growing at around 13 per cent. It is likely to follow the same rate. There could be some improvement in construction equipment also,” Revankar said. “MSME and gold are growing at around 30 per cent and two-wheelers growth in this quarter has been exceptionally good due to festive demand. Overall, high-yielding products are doing well,” he added.
