Piramal Enterprise to provide for ₹3,164-crore AIF exposure; Emkay cuts target price as it sees material impact on P&a

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Piramal Enterprises and Piramal Capital & Housing Finance in AIF units was ₹3,817 crore. In a regulatory filing, Piramal Enterprises said ₹653 crore of this pertains to funds that have no exposure to any debtor companies of Piramal Enterprises.

Of the remaining ₹3,164 crore, ₹1,737 crore worth of downstream investments have been made by the AIF into 3 entities that are (or were in the last 12 months) debtor companies of PEL. Also Read: LIC share price jumps over 7% to hit a 52-week high on getting a one-time 25% shareholding exemption from govt “Taking a conservative view of the regulatory intent, Piramal Enterprises intends to adjust the entire ₹3,164 crore in our financial statements through capital funds or provisions," Piramal Enterprises said.

According to a brokerage firm Emkay Global Financial Services, Piramal Enterprises will be providing for this entire ₹3,160 crore; as a result, FY24 reported P&L should see a material impact. It estimates FY24 losses to be ₹2,200 crore.

Earlier this week, the Reserve Bank of India (RBI) barred banks and NBFCs from investing in any scheme of Alternative Investment Funds (AIFs) having investment in companies that have taken loans from the lenders concerned in the past 12 months to curb the “evergreening" of loans. Banks and NBFCs, which are Regulated Entities (RE) under the RBI, make investments in units of AIFs as part of their regular investment operations.

(Exciting news! Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Further, it has directed lenders that such investments would be required to be liquidated within 30 days. Piramal Enterprises has a consolidated net worth of ₹28,710 crore