Piramal Group Completes DHFL Acquisition For Rs 38,000 Crore
DHFL resolution process closes; lenders to get paid today.
Billionaire Ajay Piramal-led Piramal Group completed the purchase of Dewan Housing Finance Corp. under the Insolvency and Bankruptcy Code on Tuesday.
The Piramal Group has transferred Rs 12,700 crore in cash to an escrow account, according to two people in the know. Financial creditors will receive the funds over the course of the day, the people said.
In a statement to exchanges, Piramal Group said that it has paid a total consideration of Rs 34,250 crore to creditors as part of the DHFL transaction.
Lenders will also get access to the cash of DHFL's book, as part of the plan. As such, in total, Piramal Group will pay over Rs 38,000 crore in cash and securities as part of the DHFL acquisition.
The debentures were transferred over the past week to various financial creditors, including banks and other debenture holders.
Financial creditor claims amount to over Rs 87,000 crore, as per details available on DHFL's website. According to the plan, DHFL will be delisted from the stock exchanges and its assets will be merged with Piramal Capital & Housing Finance Co.
We are very pleased to announce the consideration payment made towards the completion of this exciting acquisition. This accelerates our plans to become a leading digitally oriented, diversified financial services conglomerate that focuses on serving the financial needs of the unserved and underserved customers of our country.Ajay Piramal, chairman, Piramal Group
The combined entity will have 301 branches, 2,338 employees and over 1 million (10 lakh) lifetime customers, Piramal said in the statement. With the acquisition, Piramal Capital & Housing Finance's retail lending portfolio will grow by five times, he said.
"We will be a dominant player in the fast-growing affordable housing segment. Over the last two years we have successfully built our next-gen technology platform, advanced analytics engine and AI/ML capabilities," Piramal said.
"This acquisition allows us to implement these technologies across a much larger base of customers. The new merged entity is poised to be at the forefront of the digital-first retail lending market in India.”
DHFL is the first financial services company to be resolved under a special window of the IBC. The Reserve Bank of India had put the company under the bankruptcy process in November 2019.
A prolonged bidding process, full of twists and turns, involving the Piramal Group, the Adani Group and Oaktree Capital played out over the course of 2020. Finally in January this year, the financial creditors voted in favour of DHFL being sold to Piramal Group. The National Company Law Tribunal approved the bid in June.