Piramal Retail ups the ante in retail space, forays into sectors beyond mortgage lending

NEW DELHI: In a bid to aggressively scale up the share of its retail loan book and bring down wholesale lending, Piramal Retail Finance on Thursday said it has entered the consumer and used-car financing business.

It also plans to add four segments, including two-wheeler financing, education loans, unsecured small business loans and loan against shares in the next 12 months with a focus on non-metros as part of its broader aim -- to become one of the top five retail non-bank lenders over the next five years with mortgage lender DHFL, which has got a substantial retail portion, under its kitty.

“Our core target market is the budget customer of Bharat and Housing remains a very important financial need for them. However, they have a wide variety of other needs as well – to expand their business, to buy a second-hand car, etc. Availability of credit for these highly underserved segments has been limited. The target group is people in small, mid-sized cities and the idea is to be present in 1,000 locations,” said Jairam Sridharan, chief executive officer of the non-bank lender.

He added the acquisition of DHFL fits perfectly into its overall retail strategy.

“With DHFL, though we have launched a lot of non-mortgage products, our business will become very mortgage heavy. We are keen to launch more non-mortgage products so that we can cross sell products to these consumers as and when the transaction happens,” Sridharan told reporters, adding in the medium term, retail should be around two-third and the wholesale book would be around one-third. With the proposed DHFL acquisition, pending clearance by the bankruptcy courts, Sridharan expects the retail share of the lending book of Piramal Group to increase to over 40 per cent.

Currently, Piramal is in talks for at least five-six partnerships to enter education financing and merchant financing for small businesses.

“We should have 10-20 more partnerships with fintechs next one year through the merged entity (DHFL and Piramal Capital & Housing),” Sridharan said. The overall lending book is at about Rs 45,000 crore, of which Rs 5,000 crore or 11 per cent of the total lending book is from retail. The firm targets Rs 3,000 crore of new loan originations organically in the 12 months, in addition to inorganic growth.

Amid the Covid-19 pandemic, Piramal Retail said it has doubled its employee base to 1,000 in FY21, and will double it again in FY22.

At present, Piramal Retail offers seven products in its target markets –affordable housing loans, mass affluent housing loans, loans against property, secured small business loans, purchase finance, unsecured loans, and used-car loans. It is also looking to expand to ten more locations by June this year, adding to its existing 40 locations in the country.