InvestorQ : Why is Piramal Enterprises raising funds through the bond issue route?
Dilmini Mercia made post

Why is Piramal Enterprises raising funds through the bond issue route?

Dawn Cherian answered.
1 year ago

Piramal Capital, which is the financial arm of Piramal Enterprises, is planning to tap the market with its biggest-ever bond issue to the tune of Rs.3,000 crore. The purpose of this bond issue is to part-finance the takeover of Dewan Housing. It maybe recollected that PEL had won the bid for Dewan Housing in January 2021 in the NCLT after a close pitched battle with Oaktree Capital and the Adani Group.

Piramal Capital plans to raise close to Rs.3,000 crore entirely via the issue of debt notes. However, only a part of the proceeds will be used to fund the takeover of DHFL, with the balance being funded through internal resources and also through the proceeds from creditors over a period of time. This acquisition will enable Piramal to substantially expand its Indian lending operations and diversify its existing high risk real estate loan book.

Company insiders admit that the takeover of DHFL could not have happened at a better time for the Piramal Group. On the one hand, this gives them a retail edge and helps them diversify away from pure builder oriented loan book. On the other hand, it will also help Piramal loan book to grow exponentially, which would have otherwise taken them many years to achieve in the normal course of things.