Piramal Capital and Housing Finance eyeing to double retail AUM in 3 years
Piramal Capital and Housing Finance Ltd. is aiming to nearly double its retail asset under management (AUM) from Rs 50,530 crore to Rs 1 trillion over the next three years. It is also planning to venture into newer segments in the retail lending space including gold loans, microfinance loans, and co-branded cards.
“We are a little over Rs 50,000 crores now. And our hope is that over the next three years, we will get past 1 trillion. At the overall book level, not just retail, will grow this year at around 15 per cent, with some de-growth in the wholesale legacy book and growth in the retail book,” said Jairam Sridharan (pictured), MD, Piramal Capital & Housing Finance told Business Standard.
“We will remain a multi-product retail business, with focus on affordable housing. There are a few business lines that we are not yet in, which over the next few quarters and years you might see us jump into. So, a little bit of gold loans, a little bit of micro finance, and some co-branded cards. However, the core of the business will remain secured lending mostly around mortgages,” he added.
Currently, the Mumbai based NBFC offers housing loans, loan against property, business loans and salaried personal loans.
“Over the last five quarters, we have actually reduced our digital lending by more than half. That is the part of the business where we are seeing the highest kind of early signs of stress and risk and leverage of customers. Branch led businesses are seeing less impact right now. And we continue to feel good about that part of the business and we continue to grow them substantially,” Sridharan said.
The company is also looking to bring down its legacy wholesale AUM below Rs 7,000 crore by the end of financial year 2025 (FY25), which currently stands at around Rs 13,000 crore.
Recently, it sold a pool of legacy wholesale loans worth Rs 450 crore.
“In the wholesale book, we have large ticket builder finance loans, which are running down. However, we are interested in smaller ticket builder finance. So about two-thirds of our wholesale lending book today is to real estate. And we like that sector,” Sridharan said.
“We want to work towards a much smaller ticket size than what we have done in the past. So, we want to focus on less than Rs 200 crore ticket size. We are also keen on actually getting into the small developer finance market, which is much smaller size developers who are constructing one project in a small town somewhere, and who have lending needs of Rs 30-40 crore,” he added.
As far as borrowing is concerned, Sridharan said, the company is looking to tap the dollar bond market soon. It issued its maiden USD-denominated bond in July, raising $300 million at a yield of 7.95 per cent for 3.5 years.
“The market has become a lot more conducive in the last few months. And borrowing has gone significantly cheaper. Our bonds are trading today at levels which are almost 90 basis points lower than where they started trading three months ago,” Sridharan said, adding that international borrowing will constitute about 10-12 per cent of their overall borrowings by the end of FY25.
“We would like to raise Rs 15,000 – Rs 20,000 crores in H2FY25,” he said, adding that the company wants to bring bank borrowing to below 50 per cent, and tap the domestic debt market and securitization as alternative sources of funding.
First Published: Oct 04 2024 | 6:30 AM IST