GFF 2026 | Will be shocking if RBI does not hike rates by February: Piramal Finance

Piramal Finance MD & CEO Jairam Sridharan expects the Reserve Bank of India (RBI) to raise interest rates by February, with the probability of a December hike increasing amid recent developments.

“The bias for the RBI is certainly going to be towards the upside in terms of raising rates,” Sridharan said in an interview with CNBC-TV18 on the sidelines of the Global Fintech Fest 2026.

Sridharan said the probability of a December rate hike has increased with the latest news flow, but February remains the company's base case.

“But it would be shocking if there is no rate increase by February. So, it's now a matter of time,” he said.

The Piramal Finance chief said the bigger question is the pace and extent of any rate increases. He said it would be important to assess whether the RBI opts for a sharp increase or a slower, gradual approach.

“Are we looking at something which is dramatic and steep, or are we looking at something which is slow and gradual?” he said.

Sridharan said developments in long-term US interest rates would also be important, given their potential knock-on effects on India. He said US data appeared to indicate a potential increase and if that happens, it would be difficult for the RBI not to raise rates.

Financial services growth remains strong

Despite concerns about the second half of the financial year, Sridharan said the core fundamentals of the economy remained positive.

“There's just a whole lot of good news in terms of the core fundamentals of the economy,” he said.

He said financial services

companies had delivered first-quarter results that were much stronger than anticipated and expects the second quarter to look similarly strong.

“Demand has held up very, very nicely. Asset quality has held up very nicely as well,” he said.

Sridharan also pointed to the strong showing of FCNR(B) deposits, saying there was “enough and more liquidity to go around for everybody”.

He said the MSME universe had been particularly resilient and that this had surprised him, as he had expected the segment to face a much bigger setback.

The monsoon situation has also turned out better than expected, according to Sridharan. Kharif sowing is around 2–2.5% behind last year, which he said was not particularly bad despite the monsoon being meaningfully lower.

He said oil prices, the retreating monsoon and the RBI's move on interest rates were among the key areas to watch.

QIP proceeds to support organic growth

Piramal Finance raised around ₹3,850 crore through a qualified institutional placement (QIP). Sridharan said the primary use of the funds would be to support organic growth, with the company's book currently growing organically at around 25%.

“The book is growing organically at 25% levels, so there's a lot of organic growth to go around. So, our primary use case is very much going to be organic growth,” he said.

However, the company remains open to acquisitions if suitable opportunities emerge. Sridharan said Piramal Finance would be willing to consider opportunities in the microfinance, gold and MSME segments.

He said the company's stronger stock performance had improved its ability to pursue acquisitions, with the stock price up about 80% over the past year.

Sridharan said the company is in multiple conversations and that something could potentially materialise over the next 12–18 months, although there is no fixed timeline.

He added that acquisitions would depend on finding the right fit in terms of values and valuation rather than simply deploying capital.