Piramal Finance open to patient foreign capital, but no quick deals yet: CEO
Piramal Finance is open to strategic foreign investment, emphasizing a long-term growth outlook rather than quick profits. The company aims to double its assets under management to ₹1.5 trillion by FY28, focusing on retail loans and semi-urban markets.
Mumbai: Non-bank financier Piramal Finance is open to strategic foreign investors in the company, although there is nothing imminent, its managing director and chief executive Jairam Sridharan said.
“We have seen some good strategic investments happen in the market in recent times, with people willing to invest in the India market for the long run; people see potential in building a business and not just in flip and sell," said Sridharan.
Not just banks, India’s non-bank financiers have also received significant investments from overseas investors recently. The latest one is Abu Dhabi-based International Holding Company’s (IHC) decision to pour $1 billion into Sammaan Capital.
Sridharan, who joined in 2019 as the chief executive of the Piramal Enterprises’ consumer finance business, has recently been appointed as the head of Piramal Finance, the new merged entity. The finance business was earlier called Piramal Capital & Housing Finance. It was renamed Piramal Finance in March 2025 and Piramal Enterprises merged with it in September 2025. As part of the merger, Piramal Enterprises was delisted from the exchanges on 23 September. The merged entity, Piramal Finance, has now received the Securities and Exchange Board of India's approval and will start trading on 7 November.
“We are a company that is 46% owned by the Piramal family, and the family is obviously very, very long term in their outlook; it's a generational outlook on the business and it is rare to get that kind of patient capital," said Sridharan.
He said that the lender is not quite keen to onboard investors and give chunky stakes to those who have a finite view of the business. “That would not make sense for us, and is not consistent with the ethos of the company," he said.
The lender has a capital adequacy ratio, or risk buffer, of 20.7%, well above the 15% regulatory requirement of the Reserve Bank of India (RBI) for upper-layer non-banking financial companies (NBFCs). RBI regulations classify NBFCs into four layers based on their size, activity and perceived risks. The upper layer also comprises prominent names like Tata Sons, LIC Housing Finance and Shriram Finance. Those in the upper layer are subject to greater regulatory scrutiny than their smaller peers.
Given Piramal Finance’s plan to grow the loan book consistently at around 25% annually, the need for capital will arise sooner or later. The lender is aiming to double its assets under management (AUM) to over ₹1.5 trillion by FY28. At the end of the September quarter, it had an AUM of ₹91,447 crore, which it aims to increase to ₹1 trillion by the end of FY26.
“We are growing so much that we could consume capital at a fairly brisk pace and have to remain on the lookout," said Sridharan. “Right now, our feeling is that through FY26, we probably do not need capital. But at the end of that, we will probably need something; let's see."
According to Sridharan, the current growth of the business also has to do with the markets that the company caters to. He said that Piramal’s financial services have been catering to the semi-urban markets, which have been somewhat insulated from stress.
“We are not a very big player in the urban markets, the big cities and metros. As it happens, both the urban environment and the rural environments have had some struggles the last few months, but semi-urban India has done well," he said.
The non-bank lender is also planning to tap the overseas market for debt of up to $1 billion in the second half of the current financial year. “You might see us getting to the international market again, and my expectation is, we should raise — loans and bonds — at least $700-800 million and even close to $1 billion if the environment looks good."
Over the past couple of years, Piramal Finance has reduced its reliance on wholesale loans and pivoted to retail loans. Individual loans now comprise 83% of the book.
“We have built a diversified retail business and have over 5 million-plus customers now. We also crossed ₹75,000 crore in retail AUM, firmly making us one of the largest retail lenders in the country in the NBFC world," he said.
Analysts seem happy with the lender’s performance.
“The company has largely completed its transition into a retail-focused franchise with sharper underwriting, enhanced productivity, and healthy risk-adjusted credit costs," analysts at Motilal Oswal said in a note to clients on 17 October.
“With the balance sheet cleanup nearing completion and growth visibility improving across core segments, we see a compelling risk-reward at current valuations."
On wholesale lending, Sridharan said that the lender would avoid big-ticket and longer-duration loans or those above ₹500 crore. Second, it will stay away from structured credit transactions and do plain vanilla loans. Third, it will avoid concentration risk where large loans are given to connected projects and companies.
topics
