Ajay Piramal | Business Upturn

Piramal Group acquires DHFL for ₹38,000 crores

Cheryll Jain — Wed, 29 Sep 2021 07:17:06 +0000

The Piramal Group, led by Indian Billionaire Ajay Piramal, has successfully completed the acquisition of Dewan Housing Finance Corporation Ltd. (DHFL) on Wednesday, September 29. As part of the acquisition, the company will be paying a total consideration of Rs. 34,250 crores in cash and securities under the Insolvency and Bankruptcy Code (IBC). The Reserve Bank of India had put DHFL under the bankruptcy process in November 2019.

“We are very pleased to announce the consideration payment made towards the completion of this exciting acquisition. This accelerates our plans to become a leading digitally oriented, diversified financial services conglomerate that focuses on serving the financial needs of the unserved and underserved customers of our country. An important characteristic of any advanced economy is a robust insolvency code. The landmark bankruptcy reforms have made it possible to solve complex resolutions like this in a more complete and timely way,” said Ajay Piramal, Chairman, Piramal Group.

In a statement sent to the exchanges, it was announced that out of Rs. 34,250 crores to be paid by Piramal Capital and Housing Finance Ltd. (PCHFL), Rs 14,700 crores is a cash component while Rs 19,550 crores in the form of non-convertible debentures (10-year NCDs at 6.75% p.a. on a half-yearly basis).

A total of Rs. 3,800 crores will be paid to the creditors out of DHFL’s cash balance, making the total amount recovered by DHFL creditors close to Rs. 38,000 crores. This marks the first and the biggest resolution in value terms in the financial services sector under the Insolvency and Bankruptcy Code.

“There were 70,000 creditors of DHFL and most of them are recovering nearly 46 per cent of their pending dues through the successful completion of the resolution process”, the regulatory filing further added.

According to Piramal’s resolution plan, which received the green light of around 94% of the creditors in a voting process, Piramal Capital and Housing Finance Ltd. (PCHFL) will merge with DHFL with Piramal Enterprises Limited having 100 per cent ownership of the merged entity.

Piramal Enterprise searching acquisition opportunities in multiple pharma asset

Govindraj Muttepawar — Fri, 25 Jun 2021 12:35:35 +0000

Piramal Enterprise Ltd commonly known as PEL has said that they are looking to multiply their acquisition opportunities across the pharma business, including the re entry in domestic formulation, which they had exited back in 2010.

In its FY21 annual reports, the company said that it is looking at acquisition of very niche manufacturing capability for the Contract Development and Manufacturing Organisation (CDMO).

CDMO is a company which serves other businesses and companies specifically in pharmaceutical industry through contract basis which helps them provide with a comprehensive service from drug development to manufacturing processes.

Ajay Piramal, the chairman of Piramal Enterprise Ltd in their annual report said that, “the Carlyle Group’s recent strategies in investment confirms that the business is underlying strength and can provide with war chest for the upcoming phases on the company growth.”

Piramal added that each of the pharma businesses always have a compelling planning for their organic growth including multiple acquisition opportunities. They believe to continue to deliver in this line with a long term growth record through sustainable initiatives.

Last year Piramal had raised 3,523 cr from Carlyle in one of the largest PE deals in the Indian pharmaceutical sector. This deal was structured in a manner that the pharma business was clubbed with a subsidiary enterprise under the company itself. In this deal 20 per cent equity wad given to Carlyle.

Almost 63 per cent of the revenues of the whole pharma businesses come from CDMO business, under which the company typically provides with manufacturing services and development for generic companies and also innovators.

RBI approves Piramal Enterprises’ takeover of DHFL

Arnav Dogra — Thu, 18 Feb 2021 10:16:44 +0000

According to anonymous sources, the Reserve Bank of India (RBI) has given approval to billionaire Ajay Piramal’s Piramal Group for the takeover of the bankrupt Home Loan firm Dewan Housing Finance Corporation (DHFL), Moneycontrol reported.

DHFL is now working on a proposal which will be taken to the National Company Law Tribunal (NCLT) in a few days where the legalities of the acquisition will be worked upon.

This update has come only a month after the Piramal Group won the auction to take over Dewan Housing in which it was contending against Oaktree, an American asset management company. Although Oaktree’s bid was the highest at Rs 35,700 crore compares to Piramal’s, which was at ₹32,250 crore, Piramal bagged the deal since it was offering higher upfront payment to creditors and equity infusion into DHFL.

The board of DHFL, in a meeting on January 15, voted in favour of Piramal for the takeover. Piramal Enterprises was able to get more than 94% votes, while Oaktree was lagging far behind at 45% votes, followed by another bidder, Adani Capital, at 18% votes.

DHFL had declared bankruptcy in 2018, when its losses reached record high due to the then-ongoing liquidity crunch in the Infrastructure Leasing & Financial Services (IL&FS) sector.

Piramal Enterprise share price shoots up over 4%

Arnav Dogra — Tue, 02 Feb 2021 08:23:28 +0000

The share price of Piramal Enterprise Ltd shot up today and was trading up at 4.07% at 1:13 PM (IST).
The share had last closed at Rs 1404.55 on 1st February and it was able to reach an intraday high of Rs 1461.70 with its intraday low being Rs 1404.0.

The company had reported overall net sales of Rs 3301.84 crore during the Q2 results, which was up by 12.41% compared to previous quarter’s Rs 2937.34 crore.

The stock traded reflected a higher P/E ratio of 654.66 which indicated that the investors were willing to pay a higher price in anticipation of better growth in the coming future. Price-to-book value at 0.73 reflected the true value of the firm and proved that the investors were ready to pay even for no growth in the business.

As of the quarter ending December 2020, the domestic institutional investors held 1.26% of stake in the company, while foreign institutional investors held 28.59%.
The promoter holdings were reported at 46.06%.

The net profit for the last quarter stood at Rs 628.31 crore, up 13.27 per cent from the same quarter a year ago.

Piramal Group to take charge of DHFL

Ruchira Sonawat — Mon, 18 Jan 2021 06:46:55 +0000

Billionaire Ajay Piramal’s Piramal Capital & Housing Finance Limited emerged as the winning bidder for Dewan Housing Finance Limited (DHFL), with almost 94% creditors voting in its favour on Friday. While the rival Oaktree Capital did not even manage to secure half of the creditor’s votes.

The development also brings some resolution to a key case in India’s insolvency system, where high profile cases have at times lingered on for years. Dewan was put into an insolvency process after it was seized by the central bank in a shock move in late 2019.

The bankruptcy of India’s biggest shadow lenders had also captivated global money managers. More than two dozen firms including Goldman Sachs and Morgan Stanley showed initial bidding interest before the list of potential suitors narrowed.

That bidding contest showed interest in the nation’s soured bank loans, which stood at about 7.7 trillion rupees in the latest data at the end of September. A new wave of investors has bet they can eke out profits from India’s rising number of capital-starved businesses struggling to stay afloat amid the pandemic.

Shadow lenders like Dewan are crucial to India’s economy, lending to small merchants and tycoons alike. The non-bank financing industry fell into crisis in 2018 when financier IL&FS Group suddenly stumbled, and the pandemic has added to strains. Policymakers have stepped in with support, channelling liquidity to the sector last year.

Piramal resorts to hedge funds to finish uncompleted projects

Chittesh Dalmia — Tue, 14 Jul 2020 06:09:04 +0000

Piramal resorts to hedge funds to finish uncompleted projects. Piramal Enterprises Ltd resorts and scouts for new investors to help hedge funds raise cash and fund working capital. For the real estate projects it leads. Piramal Enterprises Ltd is seeking new investors including hedge funds. In order to help raise cash and fund working capital for the real estate projects it lends to so they don’t languish half built.

The firm controlled by Chairman Ajay Piramal is looking to bring in investors alongside its real estate-focused shadow bank unit to help complete projects, said Khushru Jijina, Managing Director of Piramal Capital & Housing Finance Ltd. The focus is on developers the lender has already provided loans to, Jijina said in an interview.

India’s real estate market is grappling with a lingering lock down. Slowed construction and sharply crimped new sales in an already struggling market. Developers have been leaning on lenders like Piramal to fund the cash needed. To complete partly-built projects to bridge funding gaps resulting from a lack of revenue.

Piramal Wants Raised Cash

“Bringing in the right co-investor will allow a continued flow of working capital to the developer, which will in turn ensure that the project is completed and our asset quality is conserved,” Jijina said. “We do not want a partner who will only be interested in outright buyouts and then just leave.”

Piramal forecasts having to fund as much as ₹1,500 crore ($200 million) in working capital to developers to finish projects assuming the firms’ repayments to it are negligible due to the Coronavirus outbreak.

The sector was struggling even before the virus pandemic. The collapse of Infrastructure Leasing & Financial Services Ltd in 2018 triggered a credit crisis that has since claimed other victims including Dewan Housing Finance Ltd and Altico Capital India Ltd., another real estate lender.

Piramal has raised as much as ₹8,000 crore in this financial year through debt. Which were raised Rs 900 crore from two public sector banks. United Bank of India and Bank of India at 8.9% for five years. And Rs 500 crore from IndusInd Bank for one year at 9% to meet the obligations. Combined with its ₹4,000 crore in cash at the end of March. However, this will enable Piramal to keep funding its developers. Also paying back the ₹10,000-crore debt due in the six months ending September, Jijina said.

Recently, Carlyle and Piramal Pharma sign agreement on a 20% Strategic Growth Investment.

#SBIConclave | Ajay Piramal of Piramal Group says that we must recognise the importance of real estate sector to the economy.

'We must recognise real estate is a big employment provider even for unskilled, migrant labour. Need to ensure real estate sector gets a fillip,' he adds pic.twitter.com/PZAVP0N36F

— CNBC-TV18 (@CNBCTV18Live) July 10, 2020