Piramal Enterprises stock continues to be weighed down by wholesale loans

Average cost of funds remained at 11 per cent even in December quarter, indicating tight liquidity

Piramal Enterprises’ stock shed nearly 30 per cent in CY19 and trades have been almost flat on a year-to-date basis. At Rs 1,531, it is valued at 1.1x FY21 estimated book, which is attractive. But, the question is whether this is a fair representation of the quality of the book. 

For instance, as of December 31, 2019, nearly 70 per cent of its book was concentrated by wholesale loans — 47 per cent was towards wholesale residential real estate projects, and 23 per cent was towards wholesale commercial real estate loans. Compared to its listed peers, which operate well-below the 25