Piramal Capital & Housing Finance to sell Rs 550 cr of NPLs through auction

Piramal Capital & Housing Finance Limited (PCHFL), a wholly-owned subsidiary of Piramal Enterprises, is seeking counterbids to sell two pools of non-performing loans (NPLs) worth Rs 550 crore through a Swiss challenge auction, triggered by an anchor bid of Rs 118 crore.

 

The anchor bid for the asset translates into a recovery of 21.45 per cent for PCHFL. The Swiss auction is scheduled on December 27.

 

Of the Rs 550 crore of bad loans put up for sale by PCHFL, Rs 314 crore are unsecured loans, and Rs 236 crore are secured loans. The anchor bid of Rs 118 crore consists of Rs 98 crore for secured loans and Rs 23 crore for unsecured loans.

 

 

Counterbids for the pool of bad loans have been invited by the non-banking finance company (NBFC), with the condition that all bids must be on a “full cash” basis. Additionally, counterbids, if any, have to be with a mark-up of at least 5 per cent over the anchor bid.

 

If there are no counterbids, the anchor bidder will be declared the successful bidder. However, if counterbids are received, the anchor bidder will be given the opportunity to match the highest counterbid.

 

Previously, in November, the NBFC had put on the block two pools of NPLs worth Rs 702 crore through a Swiss challenge auction. Of the total Rs 702 crore, Rs 282 crore consists of unsecured NPLs, while Rs 420 crore are secured NPLs. Earlier in September, PCHFL sold Rs 450 crore of legacy loans in September through a Swiss challenge auction.

 

The lender is bringing down its legacy book (erstwhile Dewan Housing Finance Corporation Ltd. loans), and has come up with various structures through which it can lighten its exposure to the wholesale segment. The company has guided that its legacy wholesale assets under management (AUM) will be below Rs 7,000 crore by the end of financial year 2024-2025 (FY25), which as of the September quarter stands at around Rs 13,000 crore.

 

Additionally, it aims to double its retail AUM to Rs 1 trillion over the next three years, by entering into newer segments in the retail lending space, including gold loans, microfinance loans, and co-branded cards. Currently, the Mumbai-based NBFC offers housing loans, loan against property, business loans and salaried personal loans.