Tag: dewan housing

Piramal may turn into retail facing financial powerhouse with DHFL acquisition, BFSI News, ET BFSI

Personal Finance

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Piramal Group, which bought the troubled mortgage loan player DHFL for about Rs 38,000 crore, is set to expand its retail loans business manifold.

The merger offers Piramal‘s financial services company 301 branches. At present, it has merely 14 branches and 23,286 customers. The merger would also help in improving the asset-liability portfolio and boost the share of retail loans to about 50 per cent, with the rest being wholesale book.

The merged entity aims to be the fastest-growing company in the affordable housing segment and aims to expand the branch network to 1,000 over the next 4-5 years.

Huge upside

At Rs 37,250 crore, analysts say Piramal Group is getting these assets for a steal, leaving ample room for upside.

About Rs 17,700 crore of cash in DHFL’s books will help Piramal retire a significant portion of the debt to start with and with no immediate outflow of funds from its end. For the rest, non-convertible debentures (NCDs) will be issued.

The initial five years of NCD repayments can be easily met by DHFL’s high-yielding retail book, where the rate of lending is at least upwards of 10%. It also leaves a surplus that can be reinvested in the wholesale book.

At a steeply marked-down value of about Rs 9,860 crore, the wholesale or developer book of DHFL could be a googly for Piramal.

Retail boost

Piramal may turn into retail facing financial powerhouse with DHFL acquisition

Setting up of retail business necessitates huge spends and gestation periods. It requires manpower, talent, setting up processes and branches, which Piramal gains with DHFL.

DHFL has close to 10 lakh customers and an extensive branch network, which is the main attraction for Piramal. DHFL is present in around 305 locations across the country.

The DHFL acquisition would lead to an increase of the share of retail loans in Piramal’s book to around 45% by the end of this financial year from 12%. As on March 31, the loan book stood at Rs 44,700 crore. On the other hand, Dewan Housing‘s loan book stood at Rs 38,500 crore, with retail loans at Rs 29,000 crore. Piramal is targeting 50% from retail loan book, including inorganic acquisitions.

The offer of Piramal Enterprises for DHFL is almost 60% lower than the size of the troubled lender’s balance sheet, which may take care of any issues with the loan book.

Given that both real estate sales and the trend in home loans is encouraging, Piramal may benefit more from DHFL.



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NCLAT to hear 63 Moons Technologies plea on DHFL

Banking & Finance

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The National Company Law Appellate Tribunal has agreed to hear the petition by 63 Moons Technologies challenging some of the provisions of the resolution plan for Dewan Housing Finance Corporation Ltd (DHFL).

63 Moons to challenge NCLT nod to Piramal’s DHFL buy

The NCLAT has refused to stay the resolution plan.

63 Moons holds over ₹200 crore of NCDs of DHFL. It had earlier said the current resolution plan is disappointing for NCD holders.

“Other members of the Committee of Creditors, who comprise mainly of banks, have recourse to personal guarantees of promoters whereas NCD holders do not have any such contractual recourse,” it further said, adding that NCD holders will be left high and dry with haircut of 65 per cent to 75 per cent if in future such recoveries from fraudulent transactions are allowed to pass through to the resolution applicants, instead of the creditors,” it had earlier said.

Wadhawan plans to challenge NCLT nod to Piramal’s resolution plan for DHFL

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DHFL reports fresh fraud of ₹1,424.32 cr

Banking & Finance

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Troubled Dewan Housing Finance Corporation Ltd on Friday reported another fraud, amounting to ₹1,424.32 crore.

“As per the transaction auditor report shared with the Administrator, the monetary impact of the above transactions covered under the Affidavits amounts to ₹1,264.29 crore towards outstanding principal, ₹130.09 crore towards accrued interest and ₹29.94 crore towards notional loss of interest on account of charging lower rate of interest,” it said in a regulatory filing.

According to the report of the transaction auditor – Grant Thornton, the transactions which are “undervalued, fraudulent and preferential in nature” occurred during financial years 2017-18 and 2018-19 and the person involved include Kapil Wadhawan, Dheeraj Wadhawan, Township Developers India Ltd. and entities to whom Inter corporate deposits (ICDs) were given.

“…the Administrator has filed two additional affidavits before the Mumbai bench of the National Company Law Tribunal under Section 45, Section 60(5) and Section 66 of the Code on March 04, 2021 in respect of disbursements made to certain entities ICDs, against Kapil Wadhawan, Dheeraj Wadhawan, Township Developers and entities to whom ICDs were given,” the filing further said.

Incidences of fraud

This fresh incidence of fraud has been reported by DHFL just days after it reported that the transaction auditor had detected a fraudulent transaction of ₹6,182.11 crore. Previously too, it has reported at least three such incidences.

The troubled housing finance company is in the final stages of the resolution process with Piramal Capital and Housing Finance Ltd as the successful bidder.

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