Shriram Group Forays Into Asset Reconstruction Business With Rs 300 Crore Capital Infusion

Jaipur, November 7: Diversified conglomerate Shriram Group is making a foray into the asset reconstruction business with a capital infusion of Rs 300 crore. The company also plans to launch wealth management services, a top official said on Tuesday.

Shriram ARC

The company has approached the Reserve Bank of India (RBI) with its proposal on ARC asset reconstruction and is awaiting approval from the regulator. Shriram Capital is the holding company and they are investing Rs 300 crore directly, said Umesh Revankar, the company's Executive Vice Chairman.

We are focusing on retail loans. I believe for Rs 5 to Rs 20 lakh ticket size, we feel that there is good scope for making a good margin in this business. Because nobody is doing it, he told PTI in an interaction.

Nobody wants to touch that portfolio and we feel that we can bargain and we can get a better rate, he explained on the rationale behind the reason to launch retail ARC business.

We have submitted our application to commence ARC business with the Reserve Bank of India, he said.

Shriram is well positioned to set up a retail focused ARC platform considering its strong retail presence, expertise in acquiring stressed portfolios at the right price and time tested collection track record, he said.

This will be ARC business an income for the group, and with our expertise in collections, we generate income, he said.

There are no players in the small segment ticket size of Rs 5 to Rs 20 lakh...large ticket size, you have other companies, he said.

To a query, he said the retail ARC business would be initially launched in the southern region and would be scaled up to other parts of the country. Tamil Nadu and other southern states, we will launch initially where we have expertise. Later, we will spread it all over India, he said.

Shriram Wealth Management Services

Revankar said that the company has also planned to launch wealth management services.

The Group Shriram Group is proposed to set up a separate wealth management platform which will provide a unified and bundled wealth management proposition to the existing customer base of the Shriram ecosystem, he said.

The platform would offer innovative products, customised and hyper personalized solutions, to Groups customer base, employees and vendor network, he said.

To a query, he said the wealth management business is basically offering advisory services. For example, imagine you have Rs 50 lakh, I as an advisor will advise you on what are the products I will invest your money in and for managing your money, I will charge you a fee. So, that is the service, he said.

For more than Rs 5 crore, there are enough players in the market to give wealth management services. If you say, I have Rs 50 lakh and I want your advice, there is no one to help you. We want to focus on the Rs 25 to Rs 50 lakh segment and then as the customer base grows we will grow, he said.

On whether the company has set up a target under the wealth management business, he said, ideally, we should reach Rs 10,000 crore AUM under advisory services in three years.

Shriram Group's foray into the asset reconstruction business and wealth management services is a strategic move that will help the company diversify its portfolio and tap into new growth opportunities. With its strong retail presence and expertise in collections, Shriram is well-positioned to succeed in these businesses.