Aditya Birla Group aims to bolster its financial arm with new Rs 100 cr app

At the app's launch event on Tuesday, group chairman Kumar Mangalam Birla said he was optimistic about the potential of the conglomerate’s financial services arm, Aditya Birla Capital, reported Mint.

The company is looking to expand its current customer base of 35 million by adding 30 million more over the next three years.

Birla expects a compounded annual growth rate (CAGR) of 19-21% in the credit, investments, and insurance segments of the financial services industry over the next three to five years, said the report.

The app, named ABCD Aditya Birla Capital, operates under Aditya Birla Capital Digital Ltd, a wholly owned subsidiary of Aditya Birla Capital Ltd, established in March 2023, according to the Mint report.

With a workforce of over 400 people experienced in financial services, the subsidiary offers a direct-to-consumer (D2C) platform featuring 22 products and services, including offerings from its lending, insurance, and investment divisions.

“The platform will further help Aditya Birla Capital augment its digital footprint," said Birla, adding that Aditya Birla Capital is one of the fastest-growing companies in the group, stated the Mint report.

The group is present in diverse sectors like metals, cements, fashion, textiles, and renewables, among others.

“The growth across our businesses has been aided by the expansion in the branch network. Aditya Birla Capital has added over 500 branches in the last two years, taking our pan-India physical presence to about 1,500 branches while serving 35 million customers," Birla was quoted as saying by Mint.

The financial services company is also aiming to leverage the digital payments ecosystem through its app, which includes features such as UPI (unified payments interface), bill payments, and online recharges, among other services, according to the report.

Birla praised India’s digital public infrastructure, highlighting that over the past decade, the country has developed a "trailblazing collection of public-facing digital platforms" that have significantly transformed the lives of its citizens, said the report.

“India, today, without doubt is the global leader in developing digital public infrastructure," said Birla.

“Going forward, the recently proposed merger of our NBFC business into already listed Aditya Birla Capital will further create a unified large entity with greater financial strength and flexibility enabling direct access to capital," Birla said, the report added.

Since its launch in August 2016, the UPI has triggered a digital payments revolution in India, recording more than 10 billion transactions per month since August 2023. In March, the UPI transactions reached 13.4 billion.

The Aditya Birla Group is not alone in its efforts to bolster its financial services division.

Giant conglomerates like Godrej and Reliance took note of and established a presence with aggressive endeavours in the non-banking financial services sector and embarked on digital lending ventures, Mint reported last year.

Under the current regulatory framework, setting up a bank is not feasible for business houses.

Faced with this challenge, they have sought alternative routes, finding opportunity in adjacent sectors.

As of 31 December, Aditya Birla Capital managed aggregate assets under management totalling approximately Rs 4.1 trillion.

In a recent development, Aditya Birla Capital decided to merge Aditya Birla Finance Ltd with itself last month, enabling its unlisted subsidiary to bypass the public-listing requirement mandated by the Reserve Bank of India (RBI).

While Aditya Birla Capital is publicly listed, its wholly-owned subsidiary, Aditya Birla Finance, is among the 15 upper-layer non-bank lenders instructed by the RBI to go public by September 2025, said the report.

The merger with the listed parent entity eliminates the need for the subsidiary to pursue a separate listing, it added.