L&T Finance aims to grow its loan book to Rs 3 lakh crore [1] by 2031, according to Managing Director and CEO Sudipto Roy.
This growth target signals an aggressive expansion strategy for the non-banking financial company (NBFC) as it seeks to scale its operations within the Indian credit market. The plan relies on a combination of disciplined risk management and a specific balance between asset types.
The company currently maintains a loan book size of Rs 1.21 lakh crore [2]. To reach its long-term goal, Roy said the firm is targeting an annual growth rate of above 20% per year [3].
A central component of this roadmap is the optimization of the company's portfolio. Roy said the ideal loan mix for the firm is 60% secured and 40% unsecured [4]. This balance is intended to drive growth while maintaining stability through collateralized assets.
To support this expansion, the company is focusing on specific product areas. Roy said the company is expanding gold loans and implementing a revised mortgage strategy. These moves are designed to strengthen the secured portion of the portfolio, aligning with the 60% target, while the company continues to navigate the evolving NBFC landscape in India.
Risk mitigation remains a priority as the company scales. Roy said the firm is targeting a credit cost of below 2% [5]. The CEO said that future capital-raise plans and rigorous risk management will be essential to sustain the projected growth trajectory over the next five years.
By diversifying its offerings and maintaining a strict credit cost ceiling, L&T Finance intends to capture a larger share of the retail and corporate lending market without compromising its balance sheet health.
“L&T Finance aims to grow its loan book to Rs 3 lakh crore by 2031”
L&T Finance is attempting to more than double its current assets within five years. By targeting a 60:40 secured-to-unsecured ratio, the company is attempting to balance the high yields of unsecured lending with the safety of collateralized loans. Maintaining credit costs below 2% during such rapid expansion will be the primary indicator of whether the company can grow without increasing its systemic risk exposure.
