Piramal Enterprises: Strategic Synergies, Optional Value To Follow DHFL Buyout, Says ICICI Securities
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ICICI Securities Report
Piramal Capital and Housing Finance Ltd.’s resolution plan was duly approved by Committee of Creditors of Dewan Housing Finance Corporation Ltd. by majority voting as the successful one, inching Piramal Enterprises Ltd. closer to claiming its rights over DHFL’s franchise.
ICICI Securities await specific contours of the deal to gauge financial implications and value accretion.
Nonetheless, few positive synergies emerge for the business model, if the deal consummates:
Strategic portfolio diversification intent (towards 50:50 wholesale to retail mix) will be achieved sooner;
Reduced dominance of wholesale portfolio can help ease the borrowing cost;
Multi-asset retail digital lending can get further fillip from the existing DHFL franchise; and
Unallocated net worth of ~Rs 50-60 billion can now command some optional value (utilised towards retail business ramp up).
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