In September this year, Piramal Capital & Housing Finance Limited (PCHFL) completed the acquisition of Dewan Housing Finance Limited (DHFL), thereby creating one of the largest housing finance companies in India. PCHFL has now access to over 1 million customers across 24 states with a network of 301 branches.
To address diverse financing needs of the under-served ‘Bharat’ market, the company plans to expand its operations to about 1,000 cities in the next three years, with physical presence in about 500-600 cities. In the next 12 months, it expects to open another 100 branches.
Speaking on the integration with DHFL, Jairam Sridharan, Managing Director, PCHFL, said, “We have integrated the two organisations to create one consolidated firm. There has been no attrition among employees of the erstwhile lender, and wehave been able to finalise roles for everybody. We are hiring across DHFL branches and we are working towards reigniting business origination from all branches.”
The company aims to increase the proportion of retail loans over a period of time. Currently, two-thirds of the book is wholesale, and the rest is retail. In the medium-to-long term, the company will increase the retail loans, first to half of the book, and then to two-thirds of the book.
“The acquisition has enabled us to diversify our loan book and scale up retail lending portfolio. We will differentiateby reaching out to borrowers in India’s smaller towns and cities, especially the salaried and non-salaried customers. Our multi-product offerings cater to the needs of the underserved customers in the tier 2, 3 cities of Bharat, as we aim to be the lender of choice for budget-conscious customers. We will use technology to understand the risk profile of customers and we are introducing new products other than housing loans via small business loans, MSMEs or other unsecured lending,” he added.
Further, the company intends to have a broad ecosystem of fintech companies, merchants and electronic aggregators, and a platform to originate customers. It currently has nine partnerships and is scouting for partnerships with another 20 technology firms to originate business. The company is also betting on the emerging trend of Buy Now Pay Later (BNPL).
“BNPL isan interesting product proposition which allows customers to convert the purchase directly into some instalments, usually without paying any interest if it is for a short term. We like the business and are originating a lot of customers using this model.Of the nine digital partnerships that we already have, some are already doing BNPL,” said Jairam.
In the quarter ended September 30, 2021, the overall AUM increased 42% QoQ to INR66,986 Cr. post the DHFL merger. The Retail loan book increased 4.3x QoQ toINR 22,273 Cr. and the share of retail loans increased from 11%in Jun-2021 to 33% as of September, 2021.