Piramal rejigs finance services, to scale down NBFC business

As per the new proposal, the team with Piramal Finance - the NBFC arm, will be moved under Indiareit Advisors

Piramal Enterprises, the Ajay Piramal-owned health care-to financial-services group, has decided to stop all services under its non-banking finance company (NBFC), Piramal Finance. The latter is to merge with Indiareit Fund Advisors, the real estate venture capital fund of the conglomerate.

According to the proposal, said senior executives, the Piramal Finance team will be moved under Indiareit. A K Purwar, head of Piramal Finance, will shift focus to Ajay Piramal’s private equity (PE) fund, India Venture Advisors; another head, Sudha Ravi, will move to Indiareit as executive director.

Following the merger, Piramal Capital, the financial services arm of Piramal Enterprises, will be divided into two businesses, Indiareit Fund Advisors and Structured Investments.

Ajay Piramal, chairman of Piramal Enterprises, said: “Combining the teams – Indiareit and NBFC – gives us the flexibility to provide developers with a quicker access to PE, structured debt and construction finance, as per their needs at various stages of the project lifecycle.” Construction finance services will be started on the new Indiareit platform.

Currently, the Indiareit platform manages $1.5 billion. This includes five domestic funds and one offshore fund; it also advises two third-party mandates, such as managing the Rs 700-crore fund of India Infoline. Piramal Enterprises had formed an alliance with the Canada Pension Plan Investment Board only last week to launch a real estate debt fund in India.

Piramal Finance has disbursed loans worth Rs 1,500 crore. It will remain with the group till the loan book is cleared. Khushru Jijina, managing director, Indiareit, said: “Though business will be shifted under Indiareit Advisors, we will continue our focus on real estate and education lending.”

In an earlier interview with Business Standard, Purwar, a former chairman of State Bank of India, and chairman, Piramal Finance, had spoken about the company’s plans to launch a health care vertical under an NBFC, with a focus on medical equipment.

Piramal Finance had also invested about Rs 63 crore in a Pune-based education group, Jayawant Shikshan Prasarak Mandal, which runs 35 institutes across Maharashtra.