Non-banking major Piramal Finance is open to inorganic growth opportunities in micro, gold, MSME and affordable housing loan segments to achieve its target of ₹1.5 lakh crore assets under management (AUM) by FY28, MD & CEO Jairam Sridharan said. While most of the growth will be organic, about 10 percent of the growth could come through an inorganic route at the right price, he says. Edited excerpts:
How has the demand for credit increased during the festival season?
We had very strong growth in H1FY26 and October was stronger than we expected. The slowdown associated with GST announcements is behind us and now that the new GST rates are in place, we are seeing strong growth in numbers. In our used car financing business, we are seeing a significant increase in the number of cars sold, although the average ticket size is slightly lower due to lower GST rates. However, the increase in units sold compensates for the same. So the festival season has been good and the second half seems set for very strong growth. Our AUM growth guidance is 25 percent for the current fiscal, higher than the industry average. Currently, the trends are significantly higher than we expected at the beginning of the current budget year.
You are targeting doubling assets under management to over ₹1.5 lakh crore by FY28. Would you be open to inorganic growth?
Yes, this is our stated goal. Our total loan book currently stands at over ₹90,000 crore, and by this fiscal end, we have managed assets under management of ₹1 lakh crore; We are slightly ahead of schedule in this regard. The growth from here to ₹1.5 lakh crore would be organic for the most part, but we would be open to inorganic opportunities in microfinance, gold, MSME loans and affordable housing if offered at the right price. But most of it, 80-90 percent, would be organic growth and 10 percent through inorganic growth, if we can find good opportunities.
When do you expect to have completely exhausted the old DHFL book?
By the end of this fiscal year, old books should account for about 3 percent of our portfolio; Next year it will probably be completely dilapidated.
Do you view the rapid increase in gold loan disbursements as a worrying trend?
Not really. As a gold loan product, penetration in India is actually quite low. What are the most important assets owned by a household in India? There are only 3-4 assets. House is the most important asset, then they have gold, and some people have financial assets like mutual funds, and some people have movable assets like a car, that’s all. Those are the main asset classes that people own. So in any developing economy, people will use their assets to create leverage for themselves and take on some debt. Debt keeps the economy going, and taking on debt is not in itself a bad thing; Taking on too much debt is a problem. Indian households do not have that problem.
India’s household debt to GDP ratio is among the lowest in the world. Since we have a strong cultural bias towards debt, we tend to view debt as a bad thing, and that is why India has been under the debt burden over the years. As more entrepreneurship takes off, small businesses are looking to invest and move forward; if they find out they want to take out a personal loan, they need to leverage their existing assets. There is nothing unhealthy about it as the debt burden is quite low.
What are your guidance for NIM for FY26?
We expect margins to improve. We expect a reduction in borrowing costs of around 20-25 basis points in the second half of the year, mainly because banks have not yet meaningfully reduced the marginal cost of fund-based lending rates. A few banks have reduced the MCLR slightly, but many have not. So, the RBI’s repo rate cut has not yet taken place on the MCLR front. I expect this to happen in the coming months.
Your advice on credit costs?
Credit costs will probably remain the same. Not much happens and the environment is relatively favorable. Naturally, there was an increase halfway through the last financial year, and it has been stable and slightly improving since the fourth quarter of 2025. Regarding credit risk, the outlook is very stable.
Are you planning to exit your investments in Shriram Group?
These are unlisted entities of Shriram Group, the life and general insurance companies. We own a single-digit interest in these entities. These are private companies, so there is no trade value. We will continue to have private discussions with potential investors to see how and when we can divest. We had said that for us these are now financial investments, and not strategic ones. We are not setting a specific timeline as the negotiations are sensitive in nature.
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