Why NBFC major Shriram Finance sees passenger vehicle finance driving faster growth in the coming years

Shriram Finance, the second largest private sector non-banking finance company in the country, is targeting a strong push in the passenger vehicle lending business, where it expects to double industry market share, while also scaling up in gold loans and expanding its MSME business over the next few years.
 
The company had assets under management of over Rs 3.13 lakh crore at the end of the April-June quarter, growing more than 15% from a year ago. Commercial vehicle loans accounted for 46.86% of its total AUM, followed by passenger vehicles at 21.88%.
 
“We do feel we have a huge opportunity in passenger vehicles because our market share in PVs is very small. Totally, new and used vehicles put together, we should be around 5% of the market share. So, we have a huge scope. We can double it to 10% by this financial year-end,” Umesh Revankar, executive vice-chairman of Shriram Finance, told Business Today.
 
The commercial vehicle (CV) market continues to see traction, with growth expected to be around 12-15% this year, according to him. However, the PV lending business will grow at a faster clip as the scope is larger, he said. He particularly sees opportunity to grow the PV lending business in the rural areas.
 
The company is also scaling up its gold loan business. Gold loans accounted for just 2.39% of its overall AUM in the June quarter, but that has steadily grown. It was 2.19% in the March quarter and 1.89% in the year-ago first quarter.
 
The gold loan market has seen strong traction in the last few years, as people can get more loans for the same weight of jewellery amid rising prices of the precious metal.
 
According to Experian, gold sourcing grew at 84% year-on-year in financial year 2026 and 69 per cent in FY2025, outpacing all other retail credit products.
 
From around Rs 6.3 lakh crore in March 2023, the industry AUM has grown to Rs 19.4 lakh crore in March 2026.
 
Revankar still sees a huge opportunity to tap its existing customer base, many of whom may be already availing gold loans from other companies.
 
“My customers are taking gold loans from other companies. Also, we don’t have an estimate of the total book with pawn brokers. I believe the number of pawn brokers will be ten times the number of gold loan branches put together. That is where I feel people would go to a trusted brand,” he pointed.
 
Revankar says, wherever the company has branches in residential areas, footfall for gold loans has gone up. The company is now looking to set up more such gold loan branches along with deposit-taking branches so that there is a better customer reach.
 
“We would like to focus on areas where there are a lot of working-class houses, which will make it easier to reach,” stated Revankar.
 
Shriram Finance currently has 3,250 branches and typically opens 100-150 branches each financial year, a trend that will continue. With the company already having a sizeable presence on the commercial side, there will be more specialty branches, such as gold loans, according to him.     
 
Revankar says the company has been cautious over the past year on the MSME (micro, small and medium enterprises) segment due to the uncertainties around the import tariffs imposed by the United States of America, given that many small enterprises have direct or indirect linkages to US exports. However, companies have since found many new growth markets like Africa, he noted.
 
For Shriram Finance, MSME lending will be another growth area, apart from passenger vehicle loans and gold loans, given the large credit gap in that segment.
 
“The RBI’s own calculation says the credit gap is Rs 30 lakh crore. My target is to more than double the MSME book in the next 3-4 years,” Revankar said.
 
At the end of June 2026, Shriram Finance’s MSME loan book stood at around Rs 42,000 crore. The aim is to scale the MSME loan book to Rs 1 lakh crore in 3-4 years, according to him.
 
“We have presence in most of the industrial clusters, because of the lending to trucks. We can always add more people. We are also hiring some experts in supply chain finance and large-ticket MSMEs,” he stated.