Business
Piramal pays consideration for acquisition and merger of DHFL
Piramal Enterprises Limited on Wednesday announced that it has completed payment for the acquisition of Dewan Housing Finance Corporation Ltd (DHFL), marking the first successful resolution under the IBC route in the financial services sector.
The National Company Law Tribunal, Mumbai Bench (NCLT), had earlier accorded its approval to the resolution plan of Piramal Group in relation to the CIRP (Corporate Insolvency Resolution Process) of DHFL.
In value terms, the transaction is among the largest resolutions till date, setting the precedent for future resolutions in the sector.
Speaking on the occasion, Ajay Piramal, Chairman, Piramal Group said, “We are very pleased to announce the consideration payment made towards the completion of this exciting acquisition. This accelerates our plans to become a leading digitally oriented, diversified financial services conglomerate that focuses on serving the financial needs of the unserved and underserved customers of our country.”
“An important characteristic of any advanced economy is a robust insolvency code. The landmark bankruptcy reforms have made it possible to solve complex resolutions like this in a more complete and timely way.”
Anand Piramal, Executive Director, Piramal Group said, “The combined entity will have 301 branches, 2,338 employees and over 1 million lifetime customers. We will be a dominant player in the fast-growing affordable housing segment. Over the last two years we have successfully built our next-gen technology platform, advanced analytics engine and AI/ML capabilities. This acquisition allows us to implement these technologies across a much larger base of customers. The new merged entity is poised to be at the forefront of the digital-first retail lending market in India.”
In January 2021, 94 per cent of the Creditors of DHFL voted in favour of Piramal’s resolution plan. Approvals were also obtained from the RBI, CCI and NCLT for the completion of this transaction. As a part of the process, Piramal Capital and Housing Finance Ltd (PCHFL) will merge with DHFL. The merged entity will be 100 per cent owned by Piramal Enterprises Limited.
The creditors of DHFL (including FD holders) would recover an aggregate amount of Rs 38,000 crore from the resolution process of DHFL. This amount comprises of Rs 34,250 crore to be paid by PCHFL as a combination of cash and Non-Convertible Debentures and an amount of Rs 3,800 crore, which is the entitlement of creditors (as per the resolution plan), from the cash balance available with DHFL.
There were 70,000 creditors of DHFL and most of them are recovering nearly 46 per cent of their pending dues through the successful completion of resolution process.
The total consideration paid by the Piramal Group of Rs 34,250 crore at the completion of the acquisition, includes an upfront cash component of Rs 14,700 crore and issuance of debt instruments of Rs 19,550 crore (10-year NCDs at 6.75 per cent per annum on a half-yearly basis).
The merged entity combines Piramal’s financial strength with DHFL’s geographic footprint and distribution network of 301 branches and 2,338 employees catering to 1 million lifetime customers across 24 states – making it one of the leading housing finance companies in the country.
It creates an India-wide platform focused on the affordable segment (with average loan ticket size of nearly Rs 17 lakh) to address the diverse financing needs of the under-served and unserved ‘Bharat’ market – that represents Indian budget conscious customers at the periphery of metros and in Tier I, II and III cities.
Over the last two years, Piramal Enterprises strengthened its balance sheet to take advantage of such large opportunities by raising Rs 18,000 crore of equity. It reduced net debt-to-equity and shifted towards long-term borrowings, thereby creating a headroom for significant growth in the merged entity. The acquisition is a major step under the execution of a strategic roadmap to transform our financial services business.
This transaction will not only grow the retail loan book to 5 times, but also lead to a significant diversification of the overall loan book. This paves the way for achieving nearly 50:50 retail wholesale mix in the near-term. The company will leverage the “phygital” lending platform driven by Machine Learning (ML) and Artificial Intelligence (AI), including the new mobile app.
In addition, the transaction will lead to a reduction in weighted average borrowing cost by nearly 130 basis points and should further improves the Asset Liability Management (ALM) profile of our Financial Services business.
India’s household credit to GDP at 12 per cent is lowest among sizable economies of the world, indicating a huge untapped market potential for the housing finance business in India. With major push from the Government of India towards affordable housing, the share of credit active customers in Tier 2 and Tier 3 cities/towns is significantly increasing over the last few years.
The acquisition will now provide an India-wide infrastructure with a large branch network as well as a sizable customer base that will leverage the technology-driven multi-product retail lending digital platform. It enables the company to significantly grow and diversify the retail loan book through product innovation, customised offering and superior customer experience. The share of retail financing is likely to improve to 50 per cent in near-term and 67 per cent in mid-to-long term. The growth in the retail loan book will facilitate capital efficiency in the financial services business.
The company will offer services such as used cars and two-wheeler loans; education loans for vocational and online courses; small builder finance to meet construction finance requirement; unsecured business loans; personal loans and loan against securities.
Business
‘Its Prime Real Estate’: Anand Mahindra Expresses Awe At Grandiose Of Brabus Big Boy 1200
In the City of Dreams that is Mumbai, one of the biggest ‘dreams’ of most who live in the metropolis is to find an abode, that they can call it their own. Real estate in Mumbai is known for its sky-high pricing, with figures of Rs 10-15 crore not surprising anyone.
The Motorhome
Space is a major issue in city, given the paucity of it, in a region that encompasses millions. However, what happens when the space is not only available but also mobile? That is precisely what a ‘motorhome’.
It may not been the most commonly seen or discussed avenue in this part of the world, but in other parts of the world, particularly in the US, an RV or recreational vehicle is the way of life, either by choice or by circumstance.
Mahindra Group chairman, Anand Mahindra recently reacted to one such motorhome. In a post on X, he shared a minute-long clipping of the Brabus Big Boy 1200. This is an uber-luxe, profligate motorhome manufactured by the German automobile company Brabus.
Mahindra, while reacting to the video of a person showing around the bus said, That’s not transport. It’s prime real estate.”
And one may arguably agree with Mahindra on this. The vehicle is extravagant and has a length of 12 meters or 39.4 ft and over 30 square meters or 320 sq ft. For context, the average size of homes in city of Mumbai hovers around 400-700 sq ft.
What Are The Features Of This Motorhome?
In addition, the vehicle also has two electrically extendable slide-outs on each side. These slide-outs can extend the bedroom and saloon to a width of 4.50 meters.
In addition, the motorhome also consists of a double bed measuring 160 x 200 centimeters.
A closet is integrated into the rear wall of the vehicle.
For amusement, the vehicle also has a desk and a 43-inch 4K television. Here one could watch TV programs that have been made available on the system play games on the integrated Playstation 5 system.
In addition, one can also connect to the internet through the Starlink system.
When it comes to the vehicle, it runs on a12.8-liter six-cylinder turbodiesel engine. This engine can deliver 390 kW / 530 hp and can generate a maximum torque of 2,600 Nm.
The vehicle is priced at around USD 1.5 million or a whopping Rs 12 crore.
Business
Maha will play key role in achieving India’s $5 trillion economy goal: Minister Tatkare
Nagpur, Dec 21: Representing Maharashtra in the pre-Union Budget meeting held in Jaisalmer, Minister Aditi Tatkare on Saturday assured that Maharashtra would play a pivotal role in India’s journey towards becoming a $5 trillion economy.
She emphasised the need for special financial assistance to the state in the upcoming Union Budget.
Minister Tatkare presented Maharashtra’s vision, highlighting its strategic role in realising the Prime Minister’s goal of a ‘Viksit Bharat’ by 2047.
Minister Tatkare outlined several critical issues and proposals for inclusion in the Union Budget. She urged the finance minister for central assistance for state Capital Investment by enhancing the allocation under the Scheme for Special Assistance to States for Capital Investment.
She emphasised the need for streamlining fund disbursement timelines to provide qualifying states with a minimum one-year utilisation window.
In the wake of rapid urbanisation, Minister Tatkare called for central support to tackle the challenges faced by the state.
“Maharashtra, with urbanisation expected to surpass 50 per cent in the upcoming census, faces challenges in resource mobilisation for urban local bodies (ULBs). The state government urges support for ULBs to access long-term loans for planned urban development and infrastructure enhancement,” she said.
Under the MukhyaMantri Saur Krushi Vahini Yojana 2.0, aimed at solarising agricultural feeders, Minister Tatkare sought increased targets and funding allocations for Maharashtra.
She requested expansion of Battery Energy Storage System (BESS) capacity from 500 MWh to 9,000 MWh to meet the state’s energy storage goals.
In order to further boost the modernisation of the home department, Minister Tatkare sought funds on a 60:40 basis, for projects such as digital forensic labs, mobile forensic vans, AMBIS systems, and the Cyber Security Project (Rs 837.86 crore).
She highlighted the need for funding major initiatives like Dial 112 emergency services integration and Maharashtra Police Station CCTV projects.
She urged financial support for faster case disposal through enhanced infrastructure for the judiciary.
She requested funding for constructing the Bombay High Court Complex in Bandra (East), estimated at Rs 3,750 crore.
Further, to push the implementation of the Mumbai Metropolitan Region (MMR) economic master plan, Minister Tatkare proposed a special package.
The master plan is aligning with NITI Aayog’s vision to transform MMR into a national growth hub by 2030.
According to NITI Aayog, the MMR has a potential to increase its GDP to $300 billion by 2030 from the present level of $140 billion.
The Centre’s public policy think tank has asked the Maharashtra government to concentrate on seven growth drivers and attract investment of $125-135 billion from the private sector to achieve the target.
In a bid to push the state government’s ambitious plan to make Maharashtra drought-free, the state government has sought central government support to include state-funded river-linking projects like Wainganga-Nalganga and Damanganga-Godavari under the National Interlinking of Rivers Scheme.
Further, the state government appealed to the Centre to ease revenue expenditure pressures to create fiscal space for capital projects and establish a ‘Kisan Vishesh Sahayata Nidhi’ to compensate farmers affected by trade policy interventions.
The state government also appealed for the enhancement of funding for ongoing schemes like the Jal Jeevan Mission and financial assistance for disaster-affected areas.
Minister Tatkare said the comprehensive representation highlighted Maharashtra’s ambitions and challenges, ensuring the state’s priorities were well-articulated for the Union Budget deliberations.
She reiterated Maharashtra’s commitment to becoming a cornerstone of India’s economic growth and development trajectory.
Business
Domestic stock markets to end 2024 on positive note, Nifty clocks 13 pc gain
New Delhi, Dec 21: Riding on resilient economic growth, the domestic stock markets are ending 2024 on a positive note, with Nifty registering a 13 per cent gain (year-to-date) — its ninth consecutive year of positive gains, a Motilal Oswal Wealth Management report said on Saturday.
The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277 in September.
In fact, the markets navigated significant events, such several global geo-political issues, General Elections and Budget in India, and any dips were swiftly met with strong buying activity, the report mentioned.
“The year 2025 could unfold as a tale of two halves. The first half may continue to see market consolidation, while a recovery could take place in the second half,” it added.
In the last two months, the market has corrected 11 per cent from its all-time high, amid selling by foreign institutional investors (FIIs) due to a combination of domestic and global factors.
Going forward, the Indian markets are likely to face significant influences from a combination of global and domestic economic events.
The anticipated rate cut by the RBI in February, the ongoing trend of US rate cuts, and the expectations surrounding trade policy changes post Donald Trump taking over as US President in January will contribute to market volatility.
“Additionally, the Union Budget in February will offer important signals to the market. With a fragile global economic environment and mixed macroeconomic factors at home, the market is expected to remain in consolidation mode in the near term,” the report noted.
Earnings are expected to recover in H2 FY25, driven by increased rural spending, a buoyant wedding season, and pickup in government spending.
“We further expect earnings to gain momentum, delivering a 16 per cent CAGR over FY25-27E. We remain optimistic about the long-term trend, given the strength of corporate India’s balance sheets and the prospects for robust, profitable growth,” the report said.
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