Poonawalla Fincorp Expands into Commercial Vehicle Loan Segment

Poonawalla Fincorp Limited (PFL), a non-banking finance company promoted by the Cyrus Poonawalla Group, announced on Monday the launch of its Commercial Vehicle (CV) Secured Loan Business, expanding its product portfolio into the transportation financing sector.

The new offering will provide loans for Small, Light, and Intermediate & Heavy Commercial Vehicles from all major manufacturers, covering both new and used vehicle purchases. PFL has implemented a technology solution to streamline documentation processes and reduce turnaround time for loan approvals.

In its initial phase, the company plans to establish operations in 68 locations across 12 states, with future expansion targeting 400 locations in 20 states through a hub-and-spoke model. The loans will be available through direct-to-customer channels, dealers, and other partners.

"Commercial transport sector continues to be the backbone of our growing economy. Our new Commercial Vehicle Loan directly facilitates the financial needs of transporters with streamlined processes and hassle-free documentation," said Arvind Kapil, Managing Director & CEO of Poonawalla Fincorp.

Industry analysts note that India's expanding e-commerce sector, industrial growth, and infrastructure development have increased demand for commercial vehicles nationwide. The used commercial vehicle segment is expected to form a significant portion of PFL's loan portfolio in this category.

Poonawalla Fincorp, headquartered in Pune, has been operating for nearly three decades and is listed on both the BSE and NSE. The company reported an Assets Under Management (AUM) of ₹30,984 crore as of December 31, 2024, and employs over 2,560 people across 18 states and 2 Union Territories.

The company's existing financial products include pre-owned car finance, personal loans, consumer loans, loans to professionals, business loans, loans against property, and machinery loans. This new commercial vehicle financing initiative aligns with the company's stated focus on secured lending segments.

Indian CV financing segment supports the purchase of trucks, buses, and other commercial vehicles, crucial for transportation and logistics. 

NBFCs lead with over 60% market share, including major players like Mahindra & Mahindra Financial Services, Tata Motors Finance, Shriram Transport Finance, L & T Finance, Indostar Capital Finance, Sundaram Finance, Cholamandalam Investment and Finance, and MAS Financial Services. Banks such as State Bank of India, ICICI Bank, and Axis Bank also offer CV financing, though to a lesser extent.

Emerging trends in the segment include financing for electric vehicles (EVs), digital loan processes for efficiency, and tailored solutions for small businesses. Regulatory changes, like BS VI norms, influence vehicle purchases, shaping financing patterns.