SoftBank’s investment will likely depend on Piramal’s preparedness to aggressively move into the consumer finance segment.
A potential investment by SoftBank (Japanese multinational conglomerate) into the financial services arm of the Piramal Group will likely depend on the Indian company’s preparedness to aggressively move into the consumer finance segment,
as per ET reports.
- Ajay Piramal, chairman of the Piramal Group has held talks with at least four private equity funds, including SoftBank, for an investment in Piramal Capital and Housing Finance (PCHFL), said people close to the matter.
- SoftBank’s final decision to back the Piramal Group will hinge on splitting its retail and wholesale books and adding a technology layer to the business, said people familiar with the detailed discussions.
- Piramal Finance and Piramal Capital merged to form Piramal Capital and Housing Finance (PCHFL) in March last year.
- The group’s wholesale real estate exposure stands at 63%, while housing finance forms 9%. It has a total book size of Rs 56,000 crore.
- Piramal Capital’s real estate loans account for Rs 40,160 crore. The group is, however, looking to expand into other areas of retail consumer lending through housing finance.
- SoftBank’s interest in Piramal’s business, with no underlying technology, stems from its bullishness on the overall financial services and consumer lending sector.
- Rajeev Misra, who heads Soft-Bank’s $100 billion Vision Fund, told ET in an exclusive interview last week that financial services was the biggest multiplier of GDP in any economy, but it was broken in India.
- ET reported in its June 25 edition that Piramal Capital was looking to raise as much as $400 million through external commercial borrowings to ease liquidity pressure.
- SoftBank holds around 20% stake in Paytm. It is also an early investor in the Chinese internet giant Alibaba founded by Jack Ma.
By: Abhinav Ranjan, Business Writer, DKODING Media