Aditya Birla banks on ₹100 crore app to scale financial services arm

The Aditya Birla Group is banking on a new app built at a cost of ₹100 crore to nearly double its customer base in three years and keep pace with the expected growth in India’s financial services industry.

At an event to launch the app on Tuesday, group chairman Kumar Mangalam Birla exuded confidence in the potential of the conglomerate’s financial services business Aditya Birla Capital. 

The company aims to add 30 million customers to its current base of 35 million over three years and Birla expects a 19-21% compounded annual growth rate (CAGR) in the financial services industry's credit, investments, and insurance businesses over three to five years.

The app — ABCD Aditya Birla Capital — is housed under Aditya Birla Capital Digital Ltd, a wholly owned subsidiary of Aditya Birla Capital Ltd and was incorporated in March 2023. The subsidiary employs over 400 people with experience across financial services. The direct-to-consumer (D2C) platform has 22 products and services that include products from its lending, insurance and investment businesses.

“The platform will further help Aditya Birla Capital augment its digital footprint,” said Birla, adding that Aditya Birla Capital is one of the fastest-growing companies in the group. The group is present in diverse sectors like metals, cements, fashion, textiles, renewables, among others.

“The growth across our businesses has been aided by the expansion in the branch network. Aditya Birla Capital has added over 500 branches in the last two years, taking our pan-India physical presence to about 1,500 branches while serving 35 million customers,” said Birla.

The financial services company also wants to tap into the digital payments ecosystem through its app which has UPI (unified payments interface), bill payments, and online recharges, besides other services. Birla lauded India’s digital public infrastructure and said that over the last decade or so, India has built a “pathbreaking collection of public-facing digital platforms” that have been truly transformative for the lives of citizens.

“India, today, without doubt is the global leader in developing digital public infrastructure,” said Birla.

Since its launch in August 2016, the UPI has unleashed a digital-payments revolution in India, clocking more than 10 billion transactions a month since August 2023. In March, the number of transactions on UPI stood at 13.4 billion.

The Aditya Birla Group is not the only conglomerate that is pushing its financial services business. Enthused by the pace at which Indian consumers are devouring credit, Godrej, and Reliance epitomise the aggressive push by large business houses to muscle their way into the non-banking financial services market and embark on a digital lending journey, Mint reported last year. 

Under current regulatory norms, it is impossible for a business house to set up a bank. Finding no way to enter that building, they went to the building next door and found the door open.

As of 31 December, Aditya Birla Capital managed aggregate assets under management of about ₹4.1 trillion.

Meanwhile, last month, Aditya Birla Capital decided to merge Aditya Birla Finance Ltd with itself, helping its unlisted subsidiary skip the public-listing requirement ordered by the Reserve Bank of India (RBI). Aditya Birla Capital is listed, while its wholly-owned arm Aditya Birla Finance is among the 15 upper-layer non-bank lenders mandated by the RBI to go public by September 2025. Merging with the listed parent averts the need for the subsidiary to be separately listed.

“Going forward, the recently proposed merger of our NBFC business into already listed Aditya Birla Capital will further create a unified large entity with greater financial strength and flexibility enabling direct access to capital,” Birla said.