Pepper Group is set to launch Pepper Money India in the second half of 2023. It will introduce personal finance products targeting 150 million households in tier 2 and 3 cities with significant economic growth. The company believes that India, with its young population (65% under 35 years of age) and high smartphone adoption (over 90% among 18-35 year-olds), has the potential to become one of its largest markets within the next five years.
Mike Culhane, CEO of Pepper Group, expressed confidence in Abhishek Kothari’s fintech expertise and deep understanding of the Indian consumer market. He thinks it will be instrumental in building the Pepper Money brand across India. Pepper Money India intends to establish a strong network of strategic partnerships. That includes collaborations with co-lenders and co-branded card partnerships.
As the leader of Pepper Money India, Abhishek Kothari aims to transform the financial experience for consumers in tier 2 and 3 cities by offering localized and personalized financial products.
Pepper Group has offices in India, South Korea, Australia, Spain, and the UK. The company oversees $21 billion in assets under management (AUM) through its Pepper Money brand, primarily through self-generated loans. In addition, it manages an extra $55 billion in AUM through credit management under its Pepper Advantage brand.
Brief About The Pepper Group
Financial services company Pepper Group is headquartered in Sydney, Australia. It was founded in 2000. It operated under Merrill Lynch between 2006 and 2010 before listing on the Australian Securities Exchange (ASX) in July 2015. With an initial market capitalization of A$470 million, it rose to $600 million on its first trading day.
In November 2017, KKR acquired Pepper Group for $657 million, leading to its delisting from the ASX. However, on 25 May 2021, Pepper Group was relisted on the ASX and currently employs around 2000 individuals globally.
As a global leader in financial solutions, Pepper Group offers various services across many countries like Australia, Asia, and Europe. Its offerings include lending, advisory services, and asset servicing in the residential and commercial property sectors. Moreover, the company extends its expertise to consumer, auto, and equipment finance. Setting itself apart as a people-focused lender, Pepper Group specializes in providing flexible loan solutions based on individual credit assessments.
Growth Report of Consumer Finance Industry in India
Over the past week, the Consumer Finance industry has shown a flat performance. This indicates a lack of significant movement in the market. However, Mahindra & Mahindra Financial Services, a company within this industry, experienced a loss of 3.6% during this period. Despite this short-term setback, the industry has demonstrated strong growth over the past year. With a gain of 27%, this industry is looking ahead only. The Consumer Finance industry is forecasted to continue its growth trajectory, with earnings projected to increase by 17% annually.
Investors, however, have taken a more pessimistic stance towards the Indian Consumer Finance industry. They anticipate lower long-term growth rates compared to historical trends. This sentiment is reflected in the industry’s current valuation metrics. The industry’s price-to-earnings (PE) ratio 23.8x is lower than its three-year average PE of 32.3x. This implies that the market is currently pricing the industry’s stocks at a lower multiple of their earnings, possibly due to concerns about future growth prospects.
On the other hand, the industry’s price-to-sales (PS) ratio is trading close to its three-year average of 7.9x. It indicates that the market perceives the industry’s sales generation to be consistent with historical levels. Moreover, the Consumer Finance industry has witnessed robust growth in earnings and revenues over the past three years. Earnings for companies in this sector have grown at a rate of 25% per year, while revenues have increased by 16% annually. These figures highlight the industry’s ability to generate more sales and increase profitability, suggesting a positive trend in terms of financial performance.