PEL's Ajay Piramal exploring M&A opportunities to further scale up financial services business

Piramal Enterprises Ltd (PEL) chairman Ajay Piramal is riding high on the back of Dewan Housing and Finance Ltd (DHFL) acquisition and recent Rs 4,800-crore stake sale of Shriram Finance. His next step? Look out for inorganic growth opportunities that will catapult his financial services business to new heights.

The acquisitions could be in the areas of mutual fund , general insurance and other segments of the financial services business to build scale faster.

While speaking at PEL's annual general meeting on Friday, Piramal has listed out the mid-term priorities, which will help the group in progressing on its growth path and create long-term value for shareholders.

Piramal, who is also into pharma, is targeting a mid- to high-teen growth in assets under management (AUM), with a mix of two-third retail assets and one-third wholesale. The focus is on lending to ‘Bharat markets’ in retail lending, with the use of new technology and analytics. It has also partnered with new-age fintech players like Paytm, LendingKart, Navi, Paisabazaar, Indifi, CarDekho, IndiaLends, Zest, etc for loan origination.

"We want to grow wholesale business by focusing on building a new and granular real estate and corporate mid-market lending book," he told shareholders.

The Group has completed one year post DHFL acquisition and integration. PEL, which acts like a holding company for the Group, has an overall AUM of Rs 63,989 crore with equal mix of retail and wholesale lending.

"The retail loan book witnessed growth of 49 per cent year on year and stood at Rs 32,144 crores," said Piramal. The key retail segments are affordable housing loans, secured MSME (loan against property), merchant financing , used cars , personal loans, and microfinance.

The Group has also taken a strategic call to run-down the wholesale book. "By focusing on recoveries and monetisation efforts last year, we successfully reduced the portfolio by 33 per cent on YoY basis, bringing it to Rs 29,053 crore,” said Piramal.

PEL, which earlier had a pharma business in it, is now a listed non-banking financial services entity in the wholesale lending space. This holding company, PEL, is now an operating company with a subsidiary, Piramal Housing and Finance Ltd( PHFL), which is expanding into retail.

PHFL is the subsidiary that bought DHFL.

PEL, on a consolidated basis, has earned total revenue of Rs 5,045 crore, profit of Rs 1,514 crore, and a balance sheet size of Rs 79,882 crore for 2022-23.

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