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Piramal Capital goes all out on retail

Mumbai: Piramal Capital & Housing Finance is aiming to become a financial conglomerate, with a larger focus on retail credit and moving away from builder loans by leveraging its recent tie-ups with technology startups.

The company which is in the process of acquiring Dewan Housing Finance has already inducted two technology platforms into its system that allow it to crunch credit data in-house, the chief executive of Piramal’s retail finance business, Jairam Sridharan, said. This gives the company an edge over peers that are still with legacy systems, he added.

“We should have another 10-20 partnership with fintechs next one year through the merged entity (

and Piramal Capital & Housing),” Sridharan said.

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

The company has launched used-car financing in a partnership with Cars24, which deals in pre-owned vehicles. It has also tied up with Zest for unsecured digital lending and is also offering small business loans, loans against property besides home loans as part of the retail push.

“We are reaching out to Bharat (non-metro) customers as you have to access their repayment capability through informal ways,” he said.

Piramal is keen to extend loans to low-income groups across the country. Those are typically families with both husband and wife working in organised and unorganised sectors.

Instead of rigid formal documentations, the home financier goes through informal ledgers maintained by such customers.

“You have to question the conventional wisdom as you assess repayment capability,” Sridharan said.

Such customers include, for example, a bus driver from Thane who availed of a Rs 27 lakh loan jointly with his wife, who sells vada pao, a popular street food, and takes tuition. They could not obtain a bank loan as they sought to buy a 1BHK home on the city outskirts. Piramal would fund such customers.

The group is working on an internal strategy to curve out the developers’ loan portfolio separate from the whole book, ET reported on March 30.

“We will change the composition of the loan book, three-fourths of it will likely be retail loans in the next two years,” said Sridharan.

Out of the Rs 45,000 crore lending book, retail loans now constitute Rs 5,000 crore or about 11%. With DHFL, the retail portion is expected to increase to 40% by the end of the year.

“In the medium term we expect two-thirds of our book to be retail, a big part of it will be mortgages but with the new products we are launching we expect to have a good cross sell opportunity,” said the CEO.

The company’s headcount has doubled to 1,000 in the last fiscal year; it will double again in the next one year, he said.

Total locations it serves have increased from 14 to 40 in the last one year. It is expected to be in 1,000 town in five years, as it targets small and mid-size towns in India.

On the litigations around DHFL, he said as per the bankruptcy law, DHFL’s credit committee must deal with those. “Whatever cases that have been reported have come to light post the audit by Grant Thornton so there is nothing new and we have always been aware of these case,” Sridharan said.

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