Pioneering Sustainable Finance in Dynamic Economy
Rupesh Agrawal
Group CFO,
Prabhudas Lilladher
A key player in the Indian stock broking industry, Prabhudas Lilladher is quickly establishing a global presence. The company, which has a market capitalization of Rs. 137.9 crore, operates in significant international markets, including Singapore, Hong Kong, USA, and the UK, and has a diverse portfolio that includes consumer products, advisory services, mutual funds, and institutional broking. Rupesh Agrawal, as a Group CFO of Prabhudas Lilladher, is leveraging his 25+ years of experience to reinvest cost savings to fuel innovation and growth. Rupesh believes that CFOs are no longer traditional finance people. The designation has significantly transformed from merely recording figures to drafting and devising strategies to manifold profit figures, emerging as chief financial strategy officers.
He collaborates closely with the sales and marketing teams to ensure that financial strategies support robust sales targets, driving revenue growth. His approach includes developing comprehensive risk management strategies to identify and mitigate financial risks, integrating FinTech to enhance profitability, and leveraging cutting-edge technologies to boost the firm’s performance in the dynamic financial sector in India.
In an interview with TradeFlock, Rupesh Agrawal shared insights into his achievements, major learnings, and the strategies he deploys to manage financial risks while seizing growth opportunities.
How your early experiences in Audit & Tax Consultancy influence your current financial management and leadership methods?
Audit and finance are two diverse functions. However, working in audit taught me the importance of planning ahead and looking deeper. These skills are critical in financial management, where systematic approaches are essential to adapting to unique industry demands. Being prepared for unexpected scenarios is crucial in heavily regulated sectors like stock broking and non-banking financial companies (NBFCs). Additionally, keeping abreast of industryspecific products aids in cost rationalisation. Furthermore, clearly articulating a company’s business model, future plans, and risk matrix to lenders and financiers is also important. These competencies, developed through my initial journey, continue to guide my current practices.
How do you handle financial negotiations and use the company's status to secure deals like bank guarantees and overdrafts?
Negotiation is all about presenting the right information with the right facts at the right time. As the saying goes, “Understanding your past is the first step towards securing a more advantageous future.” Knowing your company’s and your peers’ histories can help you navigate negotiations more effectively and secure more favourable terms from banks and NBFCs. Prabhudas Lilladher was established in 1944, and I have been associated with the company for close to 14 years now. I make it a point to learn something new about the company and its employees daily. Long story short, – “Balancing risks and opportunities is the art of sustaining growth even in the face of uncertainties.”
What strategies do you use to manage financial risks on a highly leveraged balance sheet while still pursuing growth in a volatile market?
First and foremost, a compliance-first approach is the key. This means strictly adhering to the covenants that define the terms of your credit lines, as lenders typically set these covenants conservatively. For instance, at Prabhudas Lilladher (PL), we are regulated by SEBI, RBI, IRDAI, and the stock exchanges as we offer various products and services. Ensuring compliance and adapting to regulatory changes secures our lenders’ trust and stabilises our financial foundation. Secondly, financial risks are managed well if proper asset-liability matching is in place. This includes a mix of structured finance options— like overdrafts against property, loans against receivables, and commercial papers—and more flexible, unorthodox borrowing methods such as inter-corporate deposits and other unsecured loans. This diversified approach allows us to leverage opportunities for growth without unduly increasing our risk exposure.
How have you significantly reduced costs through corporate finance management, and how do you identify potential areas for cost optimization?
The primary component of effective corporate finance management is a competitive interest rate with the flexibility of repayment and low-cost security. In sectors like stockbroking and non-banking financial companies (NBFCs), which are generally asset-light and service-oriented, the available security often determines financing options. Therefore, aligning with institutions that understand and support your business model is crucial, as they may offer more favourable terms, even if your credit rating isn’t top-tier, provided they are comfortable with the business model. Cost optimization is further enhanced by employing a strong Management Information System (MIS) and a robust cash management system. It’s important to monitor overnight cash balances in bank accounts carefully and use them effectively to manage liabilities like overdrafts, especially when there are delays in receiving payments from clients. And finally, a role-oriented professional team is an important ingredient of effective corporate finance management.
As a financial leader, what are your future priorities and vision, and how do you plan to use your expertise to foster sustainable growth and innovation in changing market conditions?
As a financial leader, my top priority is establishing an efficient and competitive funding structure, ensuring that our organisation always maintains a liquidity buffer to meet ongoing business needs. My strategy for fostering sustainable growth and innovation includes leveraging proven strategies, expanding my professional network, and utilising financial products tailored to our industry. I have recognized the growing demand for the Margin Trading Facility (MTF) in recent years. Seeing its potential to enhance our revenue significantly, I decided to focus our efforts on expanding MTF credit lines. We engaged extensively with lenders, demonstrating the safety and reliability of MTF lending and providing them with detailed insights into its processes. This strategic focus has successfully secured MTF credit lines totalling Rs 80 crore. Moreover, I am committed to promoting a culture of innovation within our team and organisation. By implementing strategic initiatives and making proactive decisions, I plan to position our organisation as a leader in the financial sector, driving both sustainable growth and value creation.
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