Peerless group plans Rs 1,000 crore capital expenditure over three years

The Peerless group is eyeing a capex of Rs 1,000 crore across its businesses over the next three years.

In the healthcare business, the group has lined up a capex plan of Rs 600 crore. It would be invested in setting up an oncology block at Peerless Hospital, which is undergoing expansion to increase the capacity of beds from 400 beds to about 750-800 beds.

In real estate, plans are being charted to launch a 15-floor retail-commercial-residential real estate project called Trium at Rajarhat. The investment is expected to be around Rs 400 crore.

The holding company of the group, Peerless General Finance & Investment Company (PGFI) has been granted the licence of a non-banking financial company – investment and credit company (NBFC-ICC) by the Reserve Bank of India (RBI), which would also give it flexibility to invest in subsidiaries. The licence replaces the residuary non-banking finance company (RNBC) licence that PGFI held for almost 20 years.

Jayanta Roy, managing director PGFI, said that as an investment and credit company NBFC, PGFI would have greater flexibility in treasury income, specifically in treasury investment operations and have the freedom to invest in consumer-facing subsidiary businesses.

“Bottomline is, we want to make the best use of this facility and grow the value of the company,” Roy said.

Partha S Bhattacharyya, chairman, PGFI, added that the flexibility of investing in subsidiaries provided a big opportunity to revamp the subsidiaries. “No revamping is possible without capex.”

Under the RNBC licence, permission was required to invest in subsidiaries. The change is expected to result in faster growth.

The major verticals for Peerless are: healthcare, hospitality, real estate, and financial services. The real estate business is under the fold of PGFI.

For the hospitality business, the first task is to upgrade the rooms which would be done phase-wise. Peerless has about 450 keys across properties.

Roy said that for the first time all group companies were profitable last year. In FY23, group turnover stood at Rs 635 crore and profit before tax (PBT) at Rs 196 crore. In FY22, turnover and PBT were at Rs 520 crore and Rs 149 crore, respectively.

Roy attributed the performance to a strong post-Covid recovery.