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Piramal Enterprises – Building Out The Retail Franchise In The NBFC Entity: Motilal Oswal

Piramal Enterprises Ltd. had fixed September 01, 2022 as the record date for the demerger of Piramal Pharma Ltd. Price discovery for the financial services business has already occurred, and Piramal Enterprises now trades as a diversified non-banking financial company registered with the Reserve Bank of India.

Integration of Dewan Housing Finance Corporation Ltd. has progressed well. The retail lending business continues to gain traction, with an improvement in the disbursement run-rate. Multiple partnerships with fintechs and consumer-techs have aided the momentum in the embedded finance product segment.

Asset quality (with slippages in the wholesale book) has deteriorated over the last two quarters, with Piramal Enterprises making provisions in corresponding accounts.

The company currently carries expected credit loss provisions of 6.2% of its total assets under management and ~8.5% on its wholesale AUM, with a provision coverage ratio of 38%/~54% on stage-II/III loans.

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