INSUBCONTINENT EXCLUSIVE:
ET Intelligence Group: The stake sale by Piramal Enterprises in Shriram Transport Finance Company (STFC) points to the changing landscape
for non-banking finance companies (NBFCs) in the wake of a hardening regulatory stance by the central bank.
While the development does not
affect the fundamentals of STFC much in the medium term, it reflects the growing unattractiveness of NBFCs with higher exposure to
Rs 1 lakh crore are in the commercial vehicles segment.
According to Deepak Jasani, head of retail research at HDFC Securities, Piramal
Enterprises earned less than 6 per cent return excluding dividends on the investment of over Rs 1,640 crore made in 2013
Realty and the funding of real estate and other related projects are the two major activities of the group
The real estate sector has been facing sluggish demand and weak price trends, while low liquidity has affected the funding side of the
Piramal Group may look forward to increase exposure to retail loan portfolios
The Piramal Group also owns 20 per cent in Shriram Capital, an unlisted holding company of the Shriram group and another 10 per cent in
The latest development does not affect our call given the softness in the commercial vehicles segment and the overhang of the possible
She believes that any near term turnaround for the stock looks difficult.
