Piramal files plaint with Sebi over market rumours

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Mumbai | Published: October 11, 2019 2:11:03 AM

Piramal Enterprises (PEL) on Thursday filed a complaint with Securities and Exchange Board of India (Sebi) regarding “misleading rumours” against its financial services business.

On Thursday stock of Piramal Enterprises ended the day at Rs 1364.35 down by 2.2% on BSE.On Thursday stock of Piramal Enterprises ended the day at Rs 1364.35 down by 2.2% on BSE.

Piramal Enterprises (PEL) on Thursday filed a complaint with Securities and Exchange Board of India (Sebi) regarding “misleading rumours” against its financial services business.

The company has complained to the markets regulator against entities publishing and spreading misleading rumours about the company on blogs, social media platforms and WhatsApp. Piramal Enterprises is a diversified conglomerate with a presence in financial services, pharmaceuticals and analytics. In its statement, the company has given details of all its liabilities and assets to mitigate investor concerns.

On Thursday stock of Piramal Enterprises ended the day at Rs 1364.35 down by 2.2% on BSE. In the exchange notification during the market hours, the company stated that total borrowings in the financial services business stood at approximately Rs 39,000 crore currently, which is around 75% of the loan book.

“PEL’s financial services business received total inflows (including borrowings, asset inflows) of Rs 45,000 crore in the past one year, which comprises of 85% of the loan book as of Sep-2018,” the company said and added that it had raised Rs 24,000 crore of long-term funds since October 2018, which reflected the confidence of lenders on the quality of the loan book and the underlying assets.

The company also added that they have disbursed around Rs 19,000 crore in the past one year (i.e, between Oct-2018 to Sep-2019), of which Rs 5,000 crore was disbursed towards housing finance (retail). The company also said that it had repaid debt obligations of Rs 30,000 crore in the past one year, of which Rs 5,300 crore was repaid in the second quarter of FY2020.

In financial services, Piramal Capital & Housing Finance Limited (PCHFL), a wholly-owned subsidiary of Piramal Enterprises Limited, is registered as a housing finance company with the National Housing Bank (NHB) and is engaged in various financial services businesses. In the last one year since default by IL&FS which has resulted in liquidity tightening in the system. In the last few months there have been defaults by other non-banking finance companies such as Dewan Housing Finance Corporation Ltd (DHFL) and Altico Capital, precipitating a further crisis of confidence.

In the last one year stock of PEL is down 43% and for six months it is down by 49%, shows the data from Bloomberg. PEL on Thursday also stated that they issued Pass-Through-Certificates (PTCs) of Rs 2,400 crore in Sep-2019, which received the 2nd highest rating from CRISIL, making it the first rated securitization instrument of wholesale loan book in the Indian market, reflecting the quality of our underwriting.

The company also gave details of its loan book in a bid to allay concerns. According to a statement issued by the company, as of September 2019, only 48% of its loan book constituted of wholesale residential real estate loans, while the remaining 52% of the loan book comprised of wholesale commercial real estate (23%), corporate loans (17%) and retail loans (12%) The share of retail loans has increased to 12% as of September 2019 against merely 4% a year ago

PEL also said that they remain committed to bring in Rs 8,000-10,000 crore of equity in the financial services business during this financial year, which would further reduce leverage to less than 2x times. “PEL’s Financial Services business is amongst the least leveraged among major NBFCs / HFCs, with a debt-to-equity multiple of 3.7x (and only 2.1x considering investments in Shriram companies).

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