Piramal Finance AUM Reaches Rs 1 Trillion, Explores Strategic Acquisitions

Piramal Finance Eyes Microfinance Acquisition to Fuel Growth

Piramal Finance, a non-bank lender, has surpassed the milestone of Rs 1 lakh crore in assets under management (AUM), with plans to acquire a microfinance institution (MFI) to drive the next stage of growth. According to a top official, the company is committed to reaching its target of Rs 1.5 lakh crore in AUM by the end of March 2028.

At present, Piramal Finance's AUM is comprised of 55% home loans and loans against property. However, the company is looking to diversify its lending into newer products, which will result in a decrease of about 5 percentage points in the share of home loans and loans against property. Microlending and gold loans have emerged as key areas of growth for the company, with gold lending already underway as per target.

The company has been present in the microfinance segment for 18 months, a period marked by sector-wide challenges. However, things are normalizing in the sector, providing a favourable backdrop for potential acquisitions. Amid reports of talks with MFI IIFL Samasta, Piramal Finance is keen to expand its MFI book through acquisition, but no deal is currently imminent.

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Piramal Finance is open to mergers and acquisitions (M&A) and will consider deals worth pursuing. The company is focusing on acquiring an MFI with established branches, processes, and personnel. Additionally, it is looking for opportunities in the gold lending space, provided the business is small-sized.

In the next three years, the company aims to increase the share of gold and MFI lending in its overall AUM to up to 10%. So far, the Middle East conflict has not had a significant impact on the business, with repayments continuing smoothly. However, the company will closely monitor the situation in the next quarter.

Piramal Finance is taking a cautious approach to external commercial borrowings in light of the current environment. While the company will explore foreign borrowings in specific pockets, it will prioritize fiscal support and lender diligence to ensure that entities affected by the war receive necessary relief.

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