Piramal Enterprises Ltd (PEL) said on Thursday that certain market participants are spreading false and misleading rumours against the company's financial services business in an attempt to create panic among various stakeholders.
"In the interest of all our stakeholders, PEL has filed a complaint with the Securities and Exchange Board of India (SEBI) against publishing and spreading misleading rumours about the company on blogs, social media platforms and WhatsApp," it said in a statement.
PEL said its total borrowings in financial services business currently stands at Rs 39,000 crore which is 75 per cent of the loan book. It received total inflows (including borrowings and asset inflows) of Rs 45,000 crore in the past one year which comprises 85 per cent of the loan book.
The company raised Rs 24,000 crore of long-term funds since October 2018 which reflects the confidence of lenders on the quality of loan book and underlying assets.
It received Rs 19,000 crore in the form of repayments and pre-payments from borrowers in the last one year, reflecting the client selection and the consistent trend in sales.
Additionally, the company issued pass-through certificates of Rs 2,400 crore last month which received the second-highest rating from Crisil, making it the first rated securitisation instrument of wholesale loan book in the Indian market and reflecting the quality of underwriting.
On outflows, PEL disbursed Rs 19,000 crore in the past one year (between October 2018 to September 2019) of which Rs 5,000 crore was disbursed towards retail housing finance. The company repaid debt obligations of Rs 30,000 crore in the past one year of which Rs 5,300 crore was repaid in Q2 FY20.
The exposure to short-term borrowings reduced by 90 per cent to Rs 1,480 crore currently from Rs 18,000 crore as of September 2018. The borrowings from mutual funds reduced from Rs 15,600 crore to Rs 615 crore currently.
PEL said there was a reduction of Rs 7,900 crore in commercial papers during Q2 FY20. Bank borrowings constituted 66 per cent in overall borrowings as of last month which is significantly higher than 47 per cent as of September 2018.
The company borrowed Rs 3,000 crore from various large public sector banks last month. Currently, it has relationships with over 100 lenders including 40 banks.
As of September 2019, merely 48 per cent of the loan book constitutes wholesale residential real estate loans while the remaining 52 per cent of the loan book comprises of wholesale commercial real estate (23 per cent), corporate loans (17 per cent) and retail loans (12 per cent). The share of retail loans has increased to 12 per cent versus merely 4 per cent a year ago.
PEL continues to maintain healthy asset quality with gross non-performing assets below 1 per cent for the last 14 quarters.
PEL's financial services business is among the least leveraged among major non-banking finance companies and housing finance companies with a debt-to-equity multiple of 3.7 x (and only 2.1 x considering investments in Shriram companies). Piramal Capital and Housing Finance had a tier 1 ratio of 28.8 per cent, well above the minimum regulatory requirement
The company remains committed to bringing in Rs 8,000 crore to 10,000 crore of equity in the financial services business during this financial year which will further reduce leverage to less than 2 x.
The promoter holding in PEL remains at 46 per cent, the highest among sizeable financial services institutions in India
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