Piramal Finance Ltd. is strategically expanding its unsecured lending business, targeting 25% of its loan portfolio within the next 2-3 years, up from the current 17%. According to Managing Director and CEO Jairam Sridharan, the company is focusing on unsecured loans, loan against property, and digital lending as key growth drivers. The NBFC reported strong Q1 FY27 performance with assets under management rising 25% Y-o-Y to ₹1.07 trillion and profit after tax increasing 67% to ₹461 crore. Retail disbursements demonstrated robust growth of 44% Y-o-Y to ₹12,527 crore during the quarter. As per Business Standard, Sridharan noted that "unsecured lending is doing quite well, loan against property is doing quite well as well. The digital lending business has been doing very, very strongly as well."
Piramal Finance Ltd. has initiated a postal ballot process to seek shareholder approval for raising capital aggregating up to ₹4,000 crore through various instruments. The Board of Directors approved the proposal on July 16, 2026, authorizing the issuance of equity shares or other eligible securities. The proposed methods include qualified institutions placement, rights issue, preferential allotment, private placement, or a combination thereof, with securities to be offered to eligible investors including retail, non-institutional, and institutional investors. The remote e-voting period is open from 9:00 a.m. IST on July 19, 2026 to 5:00 p.m. IST on August 17, 2026, with results expected by August 19, 2026. According to Business Standard, Sridharan explained that "it will be a growth capital. We are growing so strongly that we will continue to require infusions of capital to support the level of strong organic growth that we are seeing in the business."
After spending the past few years building its artificial intelligence capabilities in-house, Piramal Finance is beginning to see significant payoffs from its AI strategy. The company has built a team of more than 500 software and AI engineers working on AI development, with Sridharan emphasizing their organic approach: "We are trying to use AI to save money, not to spend even more." According to Mint, over the past year, Piramal Finance's AI usage has increased fivefold, helping drive a 60 basis points decline in operating expenditure. The company's operating expenditure as a percentage of AUM stood at 3.3% in Q1FY27, down from 3.4% in the previous quarter and 3.9% a year earlier. AI now writes 57% of the business's overall code, with use cases including loan underwriting, retail disbursements, customer complaints, and software development. The cost-to-income ratio fell to 53% from 66% in the year-ago quarter, while disbursements per branch rose 23% year-on-year to ₹87 crore.
The company is implementing a multi-pronged expansion strategy across key segments. Piramal Finance has entered the gold loan business at the end of March and opened 67 gold loan branches, planning to expand to 200 branches by the end of FY27. The emphasis in the first year will remain on expanding distribution network rather than pursuing aggressive loan growth. Rural lending will be another key investment area over the next 12-18 months. Piramal Finance expanded its rural lending network to 780 branches across 607 cities during the quarter, opening around 40-42 rural branches and continuing expansion of its rural footprint. According to Sridharan, rural and gold are the big areas of focus for the next year and a half, with the company maintaining its retail loans at 85% of total AUM and wholesale lending contributing around 15%.
The company's financial metrics show strong performance across key indicators. Piramal Finance's average borrowing cost declined 33 basis points Y-o-Y to 8.8% in Q1, while the company plans to increase overseas borrowings and securitisation over the medium term to diversify funding sources. However, Sridharan noted that elevated external commercial borrowing costs have made overseas funding unattractive in the near term. The ₹4,000 crore proceeds will be utilized to augment the company's capital base for onward lending, support the growth of assets under management, and meet capital adequacy ratios. Pending the utilization of proceeds, funds may be invested in creditworthy instruments, government securities, debt or mutual funds, and deposits with scheduled commercial banks. The management remains optimistic about sector outlook, citing that progress of monsoon and interest rate trajectory would remain key monitorables for NBFCs, with recent RBI and government measures to attract foreign inflows supporting the lending environment.
