Shriram Group in talks with partners for wealth management biz foray

Chennai-based conglomerate Shriram Group is in active talks with two companies to rope them in as partners for its planned foray into the wealth management business, a top company executive told Business Standard, as he expressed hope that the deal will be finalised by June this year.
 

“We are working on it. We have some partners who are interested in joining us. We are examining that and it may take a couple of months. We are in talks with two companies,” said Umesh Revankar, executive vice-chairman of Shriram Finance. The firm will run its wealth management business through its subsidiary Shriram Credit, which, in turn, is a subsidiary of Shriram Capital.
 

Revankar said that one of the firms the company is talking to is a global major, while the other is a domestic firm. The group in November last year announced its plan to enter into the asset reconstruction (ARC) and wealth management businesses.
 

Meanwhile, Shriram Finance expects vehicle sales growth to be in single digits during the current financial year, owing to a dip during the election season. Revankar expects the demand for commercial vehicles to be slower as the entire government machinery will be involved in the election process during the first two months.
 

“Even the disbursement from the government will also be delayed. I expect a slower start but we should catch up by the second quarter. Sales are already down and I expect it to be much lower than March numbers. I expect it to be around 60 per cent of the March numbers. It will catch up by June,” Revankar said. 

In March 2024, Indian Auto Retail sector experienced a growth of 3.14 per cent compared to the same time last year. During the period, passenger vehicles, and commercial vehicles faced a decline of 6 per cent each. 

The company has also maintained its projection of a 15 per cent growth in assets under management (AUM) for the current fiscal year.

For the company, total assets under management as of March increased by 21.10 per cent and stood at Rs 2.25 trillion as compared to Rs 1.85 trillion as on March, 2023 and Rs 2.14 trillion as on December, 2023.

“We are likely to be slow in the first two months because of the elections. We expect it to be around 15 per cent by the end of the year. There is no impact on collections,” he said.

Revankar added that the company is expecting growth in passenger vehicles, two wheelers, gold and SME segment during the current financial year. 

Shriram Finance has reported a 57 per cent rise in consolidated net profit during the fourth quarter of the financial year 2023-24 to Rs 2,021.28 crore as against Rs 1,288.18 crore recorded in the same period of the previous year, owing to rise in income and improved asset quality.