Tag: TT Srinivasaraghavan

Sundaram Finance that built a lending business by financing truck purchases is preparing for the next phase of growth by funding more asset classes amid a possible boom in rural incomes and the government’s infrastructure projects, its chief executive said.

While its traditional way of doing business like physical interaction and verification of customers’ credit worthiness is unconventional, it would leverage digital, technology and data without compromising on its ethos of safety and customer orientation.

The company, which has been diversifying into funding of passenger cars, construction and farm equipment in the past few years, would look at co-lending to build newer asset classes, said Rajiv Lochan, a former McKinsey consultant who is now the managing director of the Chennai-based lender.

“The opportunities for growth and prosperity for the next five to 10 years are unprecedented,” said Lochan who succeeded TT Srinivasaraghavan who headed the company for 18 years. “What will be different is probably technology, digital, and data… Under the waterline, more enablement will happen through technology and data science, that will be different.”

Sundaram Finance, started in 1954, has been a conservative lender to truck buyers. But in the past few years it diversified into other streams of lending including funding cars as competition grew. It now looks to take advantage of technology and the prospects for the Indian economy which is set to witness a boom in rural economy and infrastructure building.

“Rural India continues to remain quite strong, and therefore bodes well for the future,” Lochan said. “On the back of normal monsoons, good procurement, good sowing, and with the downside fears not coming through, the rural segment has been quite robust.”

He said a good indication of this was the results that FMCG companies have witnessed both on volume and price fronts. Lochan, however, said the urban markets too were seeing more optimism and confidence partly driven by the progress in vaccination. He further added that the company would remain an asset lending provider, going beyond commercial vehicles into passenger cars, material handling and construction equipment.

“The infrastructure space seems to be in dramatic investment mode right now. And likewise, with the rural agri opportunity opening up on the back of unprecedented reforms in that space, which hopefully we’ll see implementation over the next few years, I think opportunities in that space will also open up.”

The government has accelerated spends in rural areas through schemes for housing, direct transfer of subsidies. It also recently announced the Gati Shakti programme which would absorb the National Infrastructure Projects worth ₹110 lakh crore.