Piramal Finance CEO says new co-lending norms may impact upfront loan monetisation models

Piramal Finance’s co-lending book stands at around Rs 5,000 crore and is growing at an annualised 20–25 per cent. While pure origination arrangements will continue to work as is under the revised framework, the model of originating loans to monetise them upfront through direct assignment or co-lending to investors may not survive, MD & CEO Jairam Sridharan told ETBFSI. Hear him on funding costs, growth priorities, regulatory changes and AI-led lending.

INTERVIEW | Piramal Finance MD & CEO Jairam Sridharan Piramal Finance’s co-lending book stands at around Rs 5,000 crore and is growing at an annualised 20-25 per cent. The NBFC is currently participating purely as an investor and is not originating much business for banks.

The CEO believes arrangements in which originators monetise loans upfront by taking the net present value of future cash flows as profit may not survive the new co-lending framework.

The lender’s cost of borrowing stands at 8.8 per cent, while fresh borrowings are being raised at 8.4 per cent, expects its overall funding cost to remain stable or decline even if interest rates rise.

Revolving credit exposure is around Rs 2,000 crore, or 2 per cent of its Rs 1 lakh crore book.

The gross impact of the proposed insurance distribution norms is estimated at 18–24 basis points of return on assets, but the company has a natural hedge through its 50 per cent ownership in an insurance business.

AI-led disbursements stood at Rs 102 crore, while collections driven entirely by AI without human intervention amounted to Rs 172 crore.

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