The Shriram Group has been a household name in the southern states. Post the merger of Shriram Transport Finance, the largest commercial vehicle financer, and Shriram City Union Finance, which was the largest two-wheeler finance firm, Shriram Finance emerged as the largest retail focused non-banking finance company in 2022. The group is now focused on scaling up its other businesses, namely the life and general insurance companies as well as its asset management arm.
Shriram, importantly, will look at a public listing of the insurance companies over the next one or two years once the companies have gained scale, according to a top company official.
"The way we are distributing insurance is more granular. We have not really made big tie-ups, arrangements. We have not even activated all our network fully. We feel there is a scope for us to scale it up and once that happens, it will be much easier to list it," Umesh Revankar, the executive vice-chairman of Shriram Finance told THE WEEK.
The general insurance could perhaps go public first, followed by the life insurance company, he said separately, adding that both the company were profitable and doing very well.
Just as it is looking to scale up insurance, Shriram has also stepped up its play in the mutual fund business. The AMC is over two decades old, but until recently was also among the smallest mutual fund house. The company is aiming to change that.
"The idea is to bring in more innovative products to stand out," said Revankar.
He pointed that the assets under management (AUM) of the company has already risen to around Rs 1,000 crore from Rs 250 crore about 18 months ago. Once again distribution will be key to the company's growth. Shriram Finance has over 3,000 branches now and this wide network will key to scaling up the asset management business.
"We hardly use 5 per cent of our branch network till now. Slowly, we will get there," Revankar said. He was speaking on the sidelines of Shriram Finance's media briefing announcing former Indian cricket player and coach Rahul Dravid as its brand ambassador.
Revankar also told reporters that Shriram Capital has received in-principle approval to set up an asset reconstruction company (ARC). The focus of the ARC will largely be on retail loans, he said.
"Our skill sets, what we have built over 50 years is retail. So, we will like to buy retail portfolio from other banks or NBFCs and try to build it," said Revankar.
He, however, pointed that the company would be very "gradual" and not rush into building scale in the ARC business.