INSUBCONTINENT EXCLUSIVE:
The Piramal Enterprises (PEL) board approved a plan to raise Rs 5,400 crore ($770 million) through a combination of preferential allotment
weakened corporate lenders and developers that have borrowed from its nonbanking financial company
I think there are operators in the market who are taking advantage of that to bring down more and more stocks without looking at the
CDPQ, which owns 2.2% of the company as per the latest regulatory filings, will take place at Rs 1,300 per share and is expected to be
completed by the end of February next year
The fresh allotment to CDPQ of Rs 1,750 crore ($250 million) is via a compulsorily convertible debenture (CCD) at a price of Rs 1,510 per
The conversion into equity shares will happen by end November.
ET had first reported on the fundraising from CDPQ and other investors on
capital issuance, investing $175 million of the total $750 million
Additionally, its real estate subsidiary Ivanhoe Cambridge has committed $250 million toward a co-investment platform with PEL to provide
Rs 2,400 crore by selling its 10% stake in Shriram Transport Finance and is confident of raising more by monetising its Shriram Capital
investment.
According to the management, the resources will largely bankroll the fledgling retail loan business as it aggressively
diversifies a predominantly wholesale exposure and provide firepower to acquire NBFC assets
The company had explored taking over troubled Dewan Housing Finance Corp Ltd (DHFL) and had held advanced negotiations before dropping
has consciously stayed away from chasing growth in the past year to conserve capital
It has sharply reduced commercial paper (CP) exposure to Rs 604 crore within a year from Rs 18,000 crore and is confident of making it zero
It has also improved the borrower mix in long-term funds of Rs 24,000 crore
Its debtequity ratio is at 2.9 times versus 4.4 times a year back.
Analysts believe risks include its large developer exposure turning into
nonperforming assets (NPAs), slipups in execution in custom manufacturing and any unrelated diversification into capital-intensive areas.