The payment will strengthen the finances of banks that have written off loans to DHFL, whose promoters are accused of fraud. Overall, financial creditors will receive around Rs 38,000 crore, which includes liquidity with DHFL and bonds worth Rs 19,550 crore.
The amount received by the creditors would be about 46% of their accepted claims. SBI, Bank of India and Union Bank among the beneficiaries. However, fixed deposit holders will get less as they voted against the resolution plan, which entitles them to only the liquidation value. As a result, they get only Rs 1,241 crore, or about 23% of their accepted claims of Rs 5,400 crore.
Piramal Capital and Housing Finance (PCHFL) will be merged with DHFL, and the name of the merged entity will be changed to PCHFL.
Chairman of Piramal Group Ajay Piramali Said that in the short term the group will rebalance its loan book 50-50 between retail and wholesale, but in the medium term the retail book will be two-thirds. Currently, it is dominated by wholesale risk.
He said that the company will soon offload the wholesale book of DHFL. When asked whether the group would continue to look at acquisitions, Piramal said that post amalgamation, the company’s debt-equity ratio would be 3.5:1, which would have given enough headroom to make acquisitions if the opportunity presents itself. Is.
With this deal, the Ajay Piramal-led conglomerate has made a decisive shift in its focus on retail lending. group first brought Jairam Sridharan, a senior executive at Axis Bank, to develop the retail portfolio. Piramal, who made his fortune in pharma, focused on real estate and diversified into lending. Six years ago, the group saw IL&FS before the collapse of the infrastructure and finance conglomerate. Piramal Enterprises had also taken a parallel stake in Shriram Capital keeping in view the synergies, but decided to exit in 2019 when things did not go well.
Piramal said going forward the group will evaluate the insurance business but has no plans to get into asset management. “The acquisition is in line with our road map to transform our financial services business over the past two years. We raised equity of Rs 18,000 crore and strengthened the balance sheet to take advantage of such huge opportunities. We have significantly reduced debt-to-equity – creating headroom for significant growth in the merged entity,” Piramal said.
“The combined entity will have 301 branches, 2,338 employees and over 1 million lifetime customers. We have built a technology platform with advanced analytics engine and AI/ML capabilities, which can be deployed across a large base of customers,” said Piramal Group Executive Director Anand Piramali.
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