Birla targets top 3 spot in MF, lending, and life insurance
Aims to add 30 mn users in 3 years on back of new platform
IT (THE PLATFORM) WILL ACQUIRE CUSTOMERS DIGITALLY AT SCALE, CROSS-SELL AND UP-SELL IN A FRICTIONLESS MANNER AND BECOME A FULLSTACK FINANCIAL SERVICES PROVIDER”
KUMAR MANGALAM BIRLA
Chairman, Aditya Birla group
The Aditya Birla group (ABG) is looking to be among the top three players in the financial services business like lending, asset management (mutual funds), and life insurance. The cements-to-fashion conglomerate launched an omnichannel digital platform on Tuesday and is betting on it to add 30 million customers in three years, said Chairman Kumar Mangalam Birla.
Speaking at the launch of Aditya Birla Digital Capital (ABCD), Birla said the new direct-to-consumer platform will further help the group's financial services arm Aditya Birla Capital Ltd (ABCL) to acquire customers, especially from the younger generation, adding to its current 35 million user base.
“It will acquire customers digitally at scale, cross-sell and up-sell in a frictionless manner and become a fullstack financial services provider,” Birla said, talking about the platform, which was built at a cost of about ~100 crore and has over 400 team members from disciplines like technology, data analytics and distribution.
Aditya Birla Capital's shares closed at ~203 a share on BSE on Tuesday.
Growing competition
Apart from ABCL, Bajaj Finance and Tata Capital have launched an app to sell financial products and scaled up investments, while the latest entrant Mukesh Ambani-backed Jio Financial Services (JFS) is also planning to use Jio's digital infrastructure to sell financial products to investors. JFS'S entry into mutual funds, wealth management, and stock broking has also led to the competition in the financial services space becoming intense. The Hinduja group is also betting on financial services with the acquisition of Reliance Capital, which had filed for bankruptcy.
Going forward, Birla said the financial services sector is expected to outpace India's gross domestic product (GDP) growth by two times in five years, and the three key components of financial services model – credit, investments, and insurance — are expected to grow at a compound annual growth rate (CAGR) of 19-21 per cent over three to five years.
“This performance will mirror the explosive growth potential expected in the financial services sector over the next few years,” Birla said.
The assets under management (AUM) of ABG'S lending unit Aditya Birla Capital Finance has grown by about two times to over ~1 trillion, propelling it to become the fourth largest diversified nonbanking financial company (NBFC) in the country. Its housing finance loan portfolio has also witnessed growth of 27 per cent year-on-year (Y-OY), as on December 31, 2023. The total premium of life insurance business stood at ~11,101 crore in the first 9 months of the financial year ended March 31, 2024 (FY24). The average AUM of the asset management company (AMC) unit was ~3.11 trillion as of December quarter of FY24.
ABCD could tap into the ecosystem of businesses like cement with 150,000 dealers and retailers and the recently launched paints business with over 50,000 channel partners.