Piramal knocks Sebi's door to counter rumours about financial services biz

Piramal Enterprises (PEL) has filed a complaint with the Securities and Exchange Board of India (Sebi) against those spreading rumours regarding the company’s financial services business. 

Rumour mongering on blogs and social media platforms is being done to create panic among various stakeholders, PEL said in a filing with the exchanges.

Elaborating on the current position of the financial services arm, PEL said that it had received total inflows (including borrowings, asset inflows) of Rs 45,000 crore in the past one year (ended September 2019). Of this, the quantum of long-term funds was about Rs 24,000 crore, reflecting the confidence of lenders on the quality of the loan book and underlying assets.

It has received Rs 19,000 crore in the form of repayments/pre-payments from borrowers in the last one year, reflecting its client selection and the consistent trend in their sales.

In addition, the firm securitised part of its wholesale loan book by issuing Pass-Through-Certificates (PTCs) of Rs 2,400 crore in September 2019.

Loan disbursement stood at Rs 19,000 crore in the past one year. Referring to loan book mix, the firm said about 48 per cent of the loan book constituted wholesale residential real estate loans, as of September 2019. 

The remaining 52 per cent of the loan book comprises wholesale commercial real estate (23 per cent), corporate loans (17 per cent) and retail loans (12 per cent). 

The share of retail loans increased to 12 per cent as of September 2019, versus a mere 4 per cent a year ago.

The company remains committed to bringing in Rs 8,000-10,000 crore of equity in the financial services business, during the current financial year. This will reduce leverage to less than 2x. 

PEL’s financial services business is the least leveraged among major NBFCs/HFCs, with a debt-to-equity multiple of 3.7x, the company said.

Piramal Capital & Housing Finance (PCHFL), a subsidiary that predominantly controls the financial services business, had a tier-1 ratio of 28.8 per cent, well above the minimum requirement.