Perpetuity Capital: Empowering Vehicle Owners With Quick And Hassle Fee Access To Secure Credit Lines

Karamveer Singh Dhillon, Co-founder, and CEO of Perpetuity Capital. 

1.Brief on Perpetuity Capital and your services.

Perpetuity Capital is a digital lending company that enables asset ownership for single owner drivers and small fleet operators. Currently, 85% of the commercial vehicles in India are owned by this segment of asset owners that have historically lacked access to bank finance. Our mission, at Perpetuity Capital, is to empower this segment of vehicle owners with quick hassle free access to stable credit lines.

2. What’s the story behind Perpetuity Capital?

Perpetuity Capital initially started out refinancing single owner drivers and small fleet operators in 2017 in the LCV/MCV segment. However, we believe the current automotive market is going through a paradigm shift as we have seen the shift from ICE to CNG in less than 5 years, and now the market is

moving towards EVs. The opportunity we are looking at is the electrification of the Auto finance space right from 2-wheelers to heavy commercial Vehicles. Our biggest motivation to start Perpetuity Capital was to streamline automotive financing in India.

3. What are the current challenges in the logistics/auto financing market?

The two biggest challenges the commercial vehicle financing markets face is the availability of capital and turn-around-time (TAT) of credit disbursal. As this segment of vehicle owners have limited access to bank finance the industry is dominated by private local lenders who charge exorbitant rates. Even getting financing from an NBFC takes up to 2-3 weeks to process.

4. Where are you in the EV mobility space at present? Do you have any plans to be EV-exclusive?

The current EV market is really in the B2B space with the retail market playing catch up, so the market will really mature in a couple of years. We have tie ups with some of the bigger EV mobility players for financing their own fleet as well as their drivers on a Driver-cum-ownership (DCO) model. Having said that, we pride ourselves in being energy agnostic and really see ourselves as enablers. We believe there is still a lot of innovation in the pipeline as the EV landscape is constantly changing; last year’s models will be rendered obsolete by next year so one really has to hedge his loan book accordingly. We are also in talks with a couple of green hydrogen makers as it’s still early days in the EV space and we are yet to see if the industry is sustainable in the long term as there is a huge natural resource constraint with rare earth minerals and our dependence on China. So we will see how the market plays out

5. What gives you an edge over your competitors?

At Perpetuity Capital, when we look at a credit we look beyond the obvious more traditional data points.

6. How do you see the auto financing space evolve in the coming years?

The market is moving towards EVs, however, Banks are still hesitant on the technology and product risk it represents. Until EV financing comes under priority sector lending funding for EV will remain expensive. I think ICE financing still represents a significant opportunity as the shift to EVs will cost an estimated X billion investment in infrastructure and charging grids.

7. What are your future plans to align with these developments?

I think the focus has always been to build an enduring business and to that extent we continue to look for opportunities in the EV space. However, our thesis has always revolved around financing commercial vehicles and we will continue to build a strong loan book in whichever segment the opportunity presents itself whether it be EV or Hydrogen in the future.