Finance
Retail therapy: Inside the business shift at L&T Finance
Roy, a financial sector professional with over two decades of banking experience, has been brought in to change the way the non-banking subsidiary of Larsen & Toubro, the eponymous builder of roads and bridges, does business, and make it as nimble and efficient as a fintech.
Despite the parentage of the engineering giant, in many eyes, L&T Finance has yet to distinctly carve out a space of its own in the financing arena. Indeed, the parent, if anything, has been displeased by the middling performance of the lender over the years.
In February 2022, at a press conference to announce that L&T Finance was exiting the wholesale loans business (funding infrastructure and real estate projects), then L&T chairman A.M. Naik had said, “Over a number of years, the only (L&T Group) company which has not performed and is publicly listed is L&T Finance…Our own board members are saying, to me at least, that greater L&T involvement is desirable so that we can drive the ideas and strategies that we want to implement in L&T Finance.”
Naik was not exaggerating.
Even after being in business for three decades, L&T Finance remains lower down the NBFC pecking order. Its total loan book, almost all (94%) of it retail (personal, home, two-wheeler loans, etc.), stood at ₹85,565 crore at the end of 2023-24.
Mahindra Finance, which started three years before L&T Finance, in 1991, is well ahead with assets under management (AUM) of ₹1 trillion at the end of the last fiscal year. Bajaj Finance, which started out in 1987 as Bajaj Auto Finance Ltd, an NBFC focusing on two- and three-wheeler finance, has eclipsed them both with an AUM of ₹3.3 trillion as of 2023-24.
L&T Finance’s price-to-book value (a measure that compares a company’s market value to its book value), at 1.97, lags peers Shriram Finance (2.17) and Bajaj Finance (5.68), though it is higher than Mahindra Finance’s 1.83, according to data from Bloomberg. In 2023-24, its return on assets—a key profitability metric—stood at 2.23%, again behind Bajaj Finance and Shriram Finance.
Junking Wholesale Loans
A large part of L&T Finance’s lacklustre performance is being blamed on its earlier focus on wholesale loans. Data from Crisil shows that these loans formed 62% of its portfolio as of 31 March 2016. According to equity analysts, that concentration was a result of the parent’s presence in those segments and the focus of the group as a whole on infrastructure.
In August 2022, not long after the press conference mentioned earlier, Naik told shareholders at L&T’s annual general meeting that steps were being taken to make the NBFC a healthier company. “We had very bad NPAs, particularly in the wholesale and realty businesses. We…are constantly looking for some of these sectors to sell, even if necessary at losses, and concentrate more on retail,” he said.
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Clearly, the wholesale business was a bad memory that the group wanted to leave behind as quickly as possible.
In June last year, The Economic Times reported that L&T Finance had invited bids from asset reconstruction companies for non-performing wholesale loans to the tune of ₹3,022 crore, across 10 accounts, mostly in the real estate sector.
As of 31 March, its wholesale book had shrunk 72% to ₹5,528 crore, from ₹19,512 crore in the previous fiscal year. And as of the June quarter of 2024-25, it had been pared to 4.8% of the overall loan book.
While it has had a modest retail book over the years, the company is now concentrating entirely on retail loans. A part of the shift toward retail happened under former chief executive officer (CEO) Dinanath Dubhashi, who retired in April, after spending 16 years at L&T Finance. The group is now banking on Roy, a former consumer banking and payments professional from ICICI Bank, to turn its fortunes around. He joined L&T Finance as its chief operating officer in July 2023 and took over the CEO role in January.
Five-pillar Strategy
“For the first six months, I focused on nothing but business,” said Roy, an avid wildlife photographer whose corner office on the eighth floor is full of photographs of tigers shot on his camera. “Dinanath gave me a free hand. The objective was to streamline the business and focus on performance delivery both in terms of credit cost and topline,” Roy told Mint.
As part of the effort to put the financier on a high-growth trajectory, the management has drawn up a five-pillar strategy, which was announced in October. The five pillars are: raising brand visibility, enhancing customer acquisition, sharpening credit underwriting; building a futuristic digital architecture and building capabilities.
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Roy quickly realized that the company needed to improve its brand recall and visibility. “I had noticed something from outside and it was also part of my discussion with SNS (L&T chairman and managing director S.N. Subramanyam) when I was going through the process of coming on board,” said Roy. “I realized that the L&T brand name is reasonably well known and well respected in urban India, but L&T Finance was thought to be predominantly rural.”
The numbers, however, show that L&T Finance’s rural leaning is a matter of perception. Rural and urban retail loans account for an equal share of the bank’s total retail loan book of ₹80,000 crore today.
I realized that the L&T brand name is reasonably well known in urban India, but L&T Finance was thought to be predominantly rural.
—Sudipta Roy
But Roy found that the brand recall and presence in urban areas was “literally next to nothing”.
Brand association is a critical aspect for Roy. While Bajaj Finance is known for its consumer durable finance, Mahindra Finance is associated with financing tractors and Shriram Finance, with used vehicles. L&T Finance, on the other hand, is not associated with any specific aspect. According to Roy, the NBFC’s three fulcrum businesses are micro-loans, tractor finance and two-wheeler finance. He therefore wants the company to be known as a diversified NBFC that “straddles both rural and urban businesses with equal ease”.
Using AI and ML
The new CEO is extremely excited about some of the technological changes at L&T Finance. There is ‘Project Cyclops’ for instance, named after the one-eyed Greek mythological figure, which was announced in a statement last month. A credit risk assessment and automated decision-making digital credit engine, Project Cyclops uses Artificial Intelligence (AI) and Machine Learning (ML) to determine the repayment capability and credit quality of potential customers.
Project Cyclops is a “three-dimensional credit engine” developed internally by a team of 100 developers, said Roy. “Since it was done internally, the cost was about ₹5 crore,” he told Mint.
How will it help? He explained that most of L&T Finance’s revenue comes from high-velocity credit businesses where quick decisions need to be made. “For instance, if a customer comes to a two-wheeler dealership and a lender doesn’t finalize whether it will finance within 30 minutes, he/she goes elsewhere,” said Roy. The new credit engine is expected to enable quick and correct decisions on who the company is lending to, especially microfinance customers, and those who are ‘new to credit’ (first-time borrowers).
“Nothing escapes Cyclops,” said Roy. “Our technology team has been working nonstop for the last 45 days to deliver it…We pushed it into beta mode (user testing to identify bugs) on 18 June and are currently using it in 25 two-wheeler dealerships. Over the next 45 days, we will scale it up to 100% of two-wheeler loans.”
After the two-wheeler business, Cyclops will be used in tractor financing, small business loans and finally for mortgages and personal loans. The financier expects Cyclops to improve underwriting standards in the sanctioning of loans.
Decent Start
Have the change in guard and the five-pillar strategy worked? While it is early to say so decisively, there has been a visible improvement in numbers. According to Roy, about a year ago, L&T Finance disbursed between ₹550-600 crore of two-wheeler loans every month; it now clocks ₹900-1,000 crore. Moreover, from 37% in the June quarter last year, the share of prime (better-rated) customers in two-wheeler loan disbursals had grown to 50% by the end of 2023-24.
₹900 crore and 1,000 crore of two-wheeler loans every month. ” title=”L&T Finance disburses between ₹900 crore and 1,000 crore of two-wheeler loans every month. “>View Full Image
“It has been going up for close to three quarters now and is serving us well…Our bounce rates (defaults in paying equated monthly instalments) are showing signs of improvement,” said Roy.
In aggregate mortgages and loans against property, it used to do ₹550-600 crore every month; now it does close to ₹900 crore. In rural business finance, the needle has moved from ₹1,550-1,600 crore last year to ₹1,900-2,000 crore per month now.
“We plan to grow our retail book to ₹2 trillion in another four years, by 2027-28,” said Roy. Currently, Federal Bank and Yes Bank have loan books close to this size.
Analysts are upbeat on the company’s push towards retail loans and the move away from wholesale credit. “There have been changes in organization structure, product mix and investments in technology at L&T Finance. We continue to remain bullish on the company and believe all these changes in the organization should eventually lead to balance sheet growth,” said Kaitav Shah, lead BFSI analyst, Anand Rathi Institutional Equities.
Others had similar things to say. According to analysts at JM Financial Institutional Securities Ltd, a combination of factors would allow the lender to report strong returns. These include its shift from wholesale to a high-return retail book; stable asset quality metrics from the thinning of its legacy wholesale book and continuous strengthening of underwriting metrics; and strategic investments in “futuristic technology”.
Tighter Regulation
While aiming for growth, the company also has to navigate a stricter regulatory environment. In September 2022, the RBI classified L&T Finance as an upper-layer NBFC. RBI regulations classify NBFCs into four layers—base, middle, upper, top—based on their size, activity and perceived risks. According to the central bank, once an NBFC is classified as being in the upper layer, “it shall be subject to enhanced regulatory requirement, at least for a period of five years from its classification in the layer”.
The upper layer comprises prominent names such as Tata Sons, LIC Housing Finance and Shriram Finance. For some of the upper-layer NBFCs, the classification came as a challenge since norms mandated them to go public within three years of being identified as one. A few, such as Piramal Capital and Housing Finance, and Aditya Birla Finance, have tried to sidestep it by announcing mergers with their listed parents.
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L&T Finance faced a similar problem. While L&T Finance Holdings, the holding company, was listed, L&T Finance, which appeared on the RBI upper layer list, wasn’t. Last December, the company went through an internal restructuring that avoided listing L&T Finance separately.
Under the merger agreement, L&T Finance, L&T Infra Credit and L&T Mutual Fund Trustee were merged into L&T Finance Holdings Ltd (LTFH) and the new entity has also been named L&T Finance.
Roy believes there has been a harmonization of regulations between banks and upper-layer NBFCs. “We do not consider ourselves different from banks. And that is the message that I have given to the team: consider that you are a bank; consider that the same regulatory standards apply to you and consider yourselves to hold the standard that a bank is expected to hold.”
Interestingly, at one time L&T Finance had ambitions of becoming a bank but decided against it after the RBI made it clear that it would not be giving licences to conglomerates.
The RBI raised the level of capital that banks need to set aside for retail loans and loans to NBFCs, raising risk weights by 25 percentage points to 125%.
On another front, the financier will face a challenging environment as the NBFC sector is staring at a slowdown in growth today. Some of this is the result of the RBI raising the level of capital that banks need to set aside for retail loans and loans to NBFCs, raising risk weights by 25 percentage points to 125%, in an effort to curb their growth and lower the systemic risk. According to estimates by rating agency Icra, 2024-25 growth in AUM is likely to moderate to 17-19% in the base case and 14-16% in the stress cases.
“The unsecured consumer loans segment would be the most impacted and may face a sharp reduction in the growth rates in FY25 after many years of sustained robust growth,” Icra stated in April. “On the other hand, LAP/SME & MFI (loan against property/small and medium business and microfinance) loans, which also drove growth in the last two years, would continue to maintain healthy growth,” it added.
That said, Roy is optimistic about delivering the goods. “As a nonbanking financial services company, we are far more agile (than a bank). We are far more nimble and are able to do things much faster.” He has made a steady start, but it will take much more to catapult L&T Finance into the top league.
DULUTH — The Duluth Homegrown Music Festival is seeking both new operational leadership and a solution to financial filing issues that caused the organization to lose its federal tax-exempt status, which it has not held since 2022.
The organization is currently operating as a taxable nonprofit, confirmed Don Ness, the former Duluth mayor who serves as president of Homegrown’s
board of directors.
Ness and the board are working to discern whether there might be any outstanding tax liabilities in the wake of an apparent filing lapse.
“It’s a serious matter that requires diligence to do things right, and to correct past oversight, and to make sure that we are in full compliance with all tax and regulatory requirements,” Ness said. “The board is 100% committed to that course of action.”
As the Duluth Monitor first reported, Homegrown had its federal tax-exempt status revoked in 2022 after failing to make required financial reports for three years. The Monitor also reported that Minnesota Attorney General Keith Ellison’s office has notified the organization it may be in violation of state law requiring the proper registration of soliciting charities.
Clint Austin / Duluth Media Group file photo
“All but one of us have been on for less than a year,” Ness said of the current board members. “We’ve been committed to saying, ‘hey, we need to improve the points of accountability.’”
The organization will also require new operational leadership. Co-directors Cory Jezierski and Dereck Murphy-Williams resigned earlier this month, after leading Homegrown through four successful festivals.
“My contract ended at the end of May, and I knew a few days later that I did not want to continue in that position,” Jezierski said. “Simply put, it was the best thing for my mental health. It’s a job that requires many, many hours and a lot of work, and it can be very stressful as well.”
Amy Arntson / Duluth Media Group file photo
Murphy-Williams did not respond to an interview request for this article, nor did preceding Homegrown director Melissa LaTour. According to LaTour’s
LinkedIn profile,
she was Homegrown director from 2016 to 2022.
Jason Beckman, a recent president who is no longer serving on the board, responded to a News Tribune email but did not provide an interview availability before this article went to press.
Ness does not believe the reporting lapses were due to any ill intent. He praised Jezierski and Murphy-Williams for their success managing festival operations. “They cared deeply about the festival,” he said. “It’s amazing to see that our community continues to support this really unique and special festival.”
“Those guys run a hell of a festival,” said Scott Lunt, festival founder and a current board member. “I think they needed help with bookkeeping.”
Clint Austin / Duluth Media Group file photo
By Jezierski’s account, issues with the festival’s tax status became apparent shortly after he became co-director. “We went to file taxes, they were rejected,” Jezierski said. “At that time we, of course, didn’t know why right away, but once we started pulling on that thread, we unraveled a whole lot of the problems that were going on.”
Jezierski said “it took a long time to try to get any sort of help” from the board, but said that by the time he and Murphy-Williams left the organization, “everything had been turned over to be reconciled” with a financial professional.
Ness, like Lunt, was deeply involved with Homegrown in its first decade but had not had an official role with the festival since then. After launching the festival in 1999 and running it on his own for several years, Lunt was “burnt out,” Ness remembered.
Derek Montgomery / Duluth Media Group file photo
After a transition period during which the festival was run in partnership with the Ripsaw newspaper, Homegrown established a nonprofit organization in 2006 with Ness as festival director. Ness subsequently stepped down when he was elected mayor in 2007.
By 2025, Ness was in his current position as executive director of the Ordean Foundation.
“I was approached by a couple of longtime music scenesters,” Ness recalled. “They said, ‘There are questions about (Homegrown’s) nonprofit status. There are questions about some governance issues. We’re concerned.’”
Ness agreed to join the board, and became president. The 2026 festival ran smoothly from an operational standpoint, but Ness found the financial reporting to be lacking.
Clint Austin / Duluth Media Group file photo
“The last board meeting that we had prior to the (co-directors’) resignations was intended to be an overview of the festival that was a month before,” Ness said. “I certainly felt very uncomfortable with how little financial information we were receiving.”
Lunt also joined the board in 2025, marking his first time serving in that capacity. He said the new board has been spending significant time addressing the accounting and reporting issues.
“Every year at Homegrown time I’m like, ‘I should get more involved,’ and then I don’t,” Lunt said. “Then this board thing came up, and it was kind of sold to me as, like, four meetings a year. I was like, ‘Oh, that’s perfect.’ And now we’re meeting weekly.”
Clint Austin / Duluth Media Group file photo
Although it’s unclear how the organization’s finances will look when the accounting and reporting issues have been fully addressed, along with any outstanding tax liabilities, both Ness and Lunt said they are confident the annual festival will continue without interruption.
“The organization will continue,” Ness said. “The festival will continue. Homegrown is in no danger in terms of its viability.” The financial documentation Ness initially received indicated budgeted revenues of about $140,000, against about $130,000 in expenses.
“Financially, I think we’re in a great spot. We have the money to hire the (financial) professionals, and we have (done so),” Lunt said. “We were hoping that we could get all this sorted out before it had to become more public.”
“We poured countless hours into this festival, and this is how it ends, with everyone talking about this,” Jezierski said. “It’s rough.”
“There’s a DIY ethos that is really at the core of Homegrown,” reflected Ness. “We’re throwing a music festival that isn’t waiting for some famous band from the East Coast to bless us with their presence. We are doing this on our own.”
Clint Austin / Duluth Media Group file photo
That DIY spirit also means “you’re kind of passing wisdom down from person to person, and sometimes that’s imperfect.” Ness continued. “The ways that we do things evolve over time, because it’s not a buttoned-down corporate sort of thing. That can create its own set of challenges.”
“It’s self-supporting,” said Lunt about the festival. “It’s widely volunteer-run. You do need to pay a couple people, obviously, to keep track of some things, but it’s going to be strong into the future. It’s gone through its bumps before.”
While most AI in financial services remains advisory, LUMIQ has built the layer that owns the decision — autonomous, auditable AI agents making regulated calls in production at leading banks, insurers, and capital markets firms. Today, LUMIQ serves clients across India, the United States, and Southeast Asia — leading institutions across insurance, banking, and capital markets.
NEW YORK and SINGAPORE, June 19, 2026 /PRNewswire/ — LUMIQ, an AI-native financial services company, today announced a strategic funding round to scale auto-decisioning for financial institutions across the United States and Southeast Asia. The round was led by Bajaj Finserv, one of India’s largest and most diversified financial services groups, with participation from existing investor Info Edge Ventures.
Right now, thousands of customers are waiting for a policy to be issued, a loan to be disbursed, a claim to be adjudicated, because somewhere an FSI employee is drowning in decisions, held back by the risk of getting it wrong. Today, when e-commerce delivers the same day, banks and insurers still decide in weeks. We built LiteCone to take that burden: AI decides the routine cases, completely and accountably, so humans spend their judgment on the one case that actually needs it. This round lets us bring that to every financial institution in the markets that matter most.
Shoaib Mohammad, Co-founder and CEO, LUMIQ
From AI that assists to AI that decides
For decades, financial institutions have bought technology that made their people faster — faster data, faster scoring, faster copilots. The decision still landed on a human. LUMIQ is changing that. Through its LiteCone platform, the company deploys AI agents that read the file, apply the institution’s own guidelines, and reach the decision end to end — escalating only the cases that genuinely require human judgment. The output is not a recommendation. It is a decision, with full reasoning attached, cross-referenced to policy, and defensible under audit.
The results in production speak clearly. At a leading life insurer, LUMIQ’s LEO agent decides 75–80% of underwriting cases with zero human touch, reduced policy issuance cost by roughly 25%, and compressed turnaround from days to under eight minutes — running 24×7 with complete auditability. Across its client base spanning insurance, banking, and capital markets in India, the US, and Southeast Asia, LUMIQ now processes millions of decisions annually.
LiteCone turns a real financial-services role into a working AI agent in weeks. Every agent we deploy is consistent, explainable, compliant, and auditable by design — not as an afterthought. This capital lets us go deeper on the platform and broader across roles. And through our cloud and AI lab partnerships, institutions will increasingly find LiteCone already embedded in the platforms they run today.
Vaibhav Dobriyal, Co-founder and Chief Product Officer, LUMIQ
Consumer confidence has plunged among traditionally optimistic younger adults amid fears for their personal finances and the wider economy, figures show.
GfK’s long-running Consumer Confidence Index remained unchanged at an overall score of minus 23 in June.
However, the analyst said this was was “misleading as, beneath the surface, there are new signs that confidence is weakening”.
Neil Bellamy, consumer insights director at GfK, said: “The biggest fall this month is among those aged 16 to 29, traditionally one of the most optimistic groups.
“Here confidence has dropped 11 points over the past month to minus two, the lowest level seen for two years, driven by large falls in views on both their own personal finances and the wider economy.
“More broadly, there are now no demographic groups with a positive confidence score, including higher-income households earning £50,000 or more, who have slipped back into negative territory as of June.
“Confidence remains subdued and vulnerable to further economic or political uncertainty.”
Overall, confidence in personal finances over the coming year remained flat at minus two, four points lower than this time last year.
The measures of both personal finances and the economy over the previous 12 months were both slightly down, by two points and three points respectively, “reflecting the sense that things have been extremely tough over the last year for so many”, GfK said.
The only measure to increase was expectations for the wider economy over the next 12 months, up two points to minus 36 but still eight points below this time last year.
The major purchase index, an indicator of confidence in buying big ticket items, remained at minus 20, four points lower than June last year.
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