Piramal to adjust Rs 3,164 cr AIF exposure to comply with new RBI order

MUMBAI:

Piramal Enterprises has decided to adjust Rs 3,164 crore worth of exposure in Alternative Investment Funds (AIFs) in its financial statements through capital funds or provisions in order to comply with the latest RBI norms in this regard.

The company said in an exchange filing on Thursday that the value of investments by Piramal Enterprises and Piramal Capital and Housing Finance in AIF units was Rs 3,817 crore as of November 30. However, of this, Rs 653 crore pertains to funds that have no exposure to any debtor companies of PEL.

“Of the remaining Rs 3,164 crore, Rs 1,737 crore worth of downstream investments have been made by the AIF into three entities that are (or were in the last 12 months) debtor companies of PEL (consolidated),” the company said.

However, Piramal said it was confident of full recovery of the underlying downstream investments in the impacted AIF units.

“PEL (consolidated) has received Rs 905 crore so far as repayment of interest and principal on these units,” the firm added.

RBI on Tuesday barred banks and NBFCs from investing in AIFs where there is any downstream investment either directly or indirectly in the debtor company.

RBI has directed that lenders would need to liquidate their investments in AIFs within 30 days should the fund invest in an existing borrower. In case banks and NBFCs are unable to do so, they will be required to make 100 per cent provisions on these investments, the RBI added.

 


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