Sridharan clarified that this was not an upgrade but a fresh rating from a new agency. The company continues to hold AA ratings from ICRA and CARE Ratings. “It’s a new agency that we’ve brought on board and they’ve rated us a AA+,” he said.
Explaining the financial impact, Sridharan said the difference in borrowing costs between AA+ and AA issuers is meaningful. “In the bond market, the delta is about 100 basis points,” he said, adding that the gap is around 50 basis points in the loan market. He expects a weighted average benefit of 50–80 basis points as existing borrowings are refinanced over time.
No urgency for capital raise or stake sale
On the possibility of foreign capital inflows or stake sales, Sridharan said the company remains open but does not need fresh capital at present. “We have a capital adequacy right now of 20.5%,” he said, noting that Piramal Finance does not require immediate dilution of equity.
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He added that with the stock trading at about 1.3–1.4 times book value, the management is “not super keen to actually do any dilution” at current valuations, though it could consider transactions at higher levels.
Growth and margin targets remain on track
Sridharan reiterated the company’s guidance of 25% or higher AUM growth for the full year. “We ended quarter two at 22%… we are well on track,” he said.
He also confirmed that the target of achieving a 7% net interest margin (NIM) by the fiscal year 2026-27 (FY27) remains intact, adding that the improved credit rating will support this goal and could help achieve it earlier in the year.
Update on insurance divestments
On asset monetisation, Sridharan said Piramal Finance has exited its stake in Shriram Life Insurance at a valuation of about 2x. The company continues to hold a 14–15% stake in Shriram General Insurance and a 50% stake in Pramerica Life.
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He said there is no urgency to sell these remaining holdings. “We are not in a tearing hurry and we are quite happy to wait for the appropriate valuations,” he said, pointing out that recent insurance deals have been valued between 1.5x and 2x embedded value.
Piramal Finance currently has a market capitalisation of ₹40,626.31 crore.
For the full interview, watch the accompanying video
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