Piramal Finance to use rising share price to fund acquisitions in microfinance, gold and MSME lending

Piramal Finance Chief Executive Officer Jairam Sridharan said the non-bank lender was looking at acquisitions in microfinance, gold loans and MSME (micro, small and medium enterprises) lending, aided by a rise in its stock price over the past year, he told CNBC-TV18 at the Global Fintech Fest in Mumbai on Thursday, September 10.

"We don't need cash for the acquisitions. We need a good strong stock price, which we have a little bit of now," he said, adding that the company did not need fresh cash for such deals. A stronger share price gave the company a better currency to fund acquisitions with its own stock, he said.

Piramal Finance's stock had risen about 80% over the past year, strengthening its hand in any potential deal, he said. He noted the company was "in multiple conversations," with a transaction possible "in the next 12-18 months," while stressing that nothing was certain.

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"This is not something that you chase. It happens to you at the right time. We need to see a fit of values and valuation," he said.

Piramal Finance had recently raised around ₹3,850 crore through a Qualified Institutional Placement (QIP), a route that lets listed companies raise money by selling shares to institutional investors. This capital would largely support organic growth, which Sridharan put at about 25%.

He also spoke about the broader economic backdrop. He said the MSME sector had proved more resilient than expected at the start of the financial year, despite an uncertain environment shaped by geopolitical tensions and volatile oil prices.

Demand and asset quality across financial services had held up well in the first half, he said, adding that he expected the second quarter to show similarly strong results.

On interest rates, he said the Reserve Bank of India was likely to lean towards raising rates, with a hike now expected around February, though he noted the chances of an earlier move in December had been rising. He linked this to the United States, where rate trends appeared headed higher, which could in turn push the RBI to act.

He also addressed asset quality in gold loans, an area under scrutiny after CIBIL data showed rising delinquencies among borrowers. Sridharan said the gold loan customer base had shifted from being a marker of financial distress to functioning more as working capital finance, which he said should support better asset quality in the segment going forward.

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