Shriram Group to foray into wealth management next fiscal, awaits RBI’s nod

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“The Shriram Group is poised to enter the wealth management business in the next financial year, FY25, while it awaits regulatory approval to venture into asset reconstruction activities, according to Umesh Revankar, Executive Vice-Chairman of Shriram Finance.


The group plans to launch its wealth management business through Shriram Credit, a subsidiary of Shriram Capital. In contrast, asset reconstruction will be undertaken directly under Shriram Capital. ‘We are planning to introduce wealth management in the next financial year. Meanwhile, we have applied for asset reconstruction and are awaiting approval from the Reserve Bank of India (RBI),’ Revankar explained.


This development coincides with a period when Shriram Finance Ltd, one of India’s largest retail non-banking financial companies, is targeting a 20 per cent increase in the company’s assets under management (AUM) during the current financial year, surpassing its earlier guidance of 15 per cent. The company has set a target of 15 per cent growth for the upcoming financial year as well.


Revankar stated, ‘Our current growth rate is 20 per cent, and we aim to maintain this AUM growth for the entire year. For FY25, we plan to adhere to our initial guidance of 15 per cent, anticipating some uncertainty in the first quarter due to potential elections.’


In the third quarter of FY24, the company’s AUM stood at Rs 2.14 trillion, a 21 per cent increase from Rs 1.77 trillion in the October to December quarter of FY23. Shriram Finance reported a slight 4 per cent rise in consolidated net profit to Rs 1,873.59 crore during the third quarter of FY24, compared to Rs 1,801.66 crore in the corresponding period of the previous year.


Regarding various business segments, the company anticipates that commercial vehicles will grow at a rate of 12-15 per cent year-on-year, while passenger vehicles are expected to see around a 13 per cent increase. ‘Our growth in commercial vehicles has been around 13 per cent Y-o-Y, and we foresee it ranging between 12-15 per cent. Passenger vehicles have been growing at about 13 per cent and are likely to continue at this rate. We might also see some progress in construction equipment,’ Revankar noted. He further added, ‘The MSME and Gold segments are expanding at approximately 30 per cent, and the growth in two-wheelers this quarter has been exceptionally strong due to festive demand. Overall, high-yielding products are performing well.”

First Published: Jan 28 2024 | 2:10 PM IST