Piramal Enterprises reports loss of Rs 2,378 cr in Q3 due to RBI's norms

New Delhi: Piramal Enterprises Ltd (PEL) on Monday posted a loss of Rs 2,378 crore on a consolidated basis in the December quarter on account of huge provisions towards its exposure in alternative investment funds.

The diversified NBFC earned a consolidated net profit of Rs 3,545 crore in the third quarter of FY23.

The firm had made a provision of Rs 3,540 crore during the October-December quarter after the Reserve Bank of India (RBI) came out with norms on lenders' exposure in AIF.

During the period under review, the consolidated income declined to Rs 2,546 crore as against Rs 2,867 crore a year ago.

Interest income also fell to Rs 1,931 crore from Rs 2,006 crore in the year-ago period.

However, the total expenses of the company stood at Rs 2,414 crore as against Rs 2,807 crore in the same period a year ago.

The company's gross Non-Performing Assets (NPAs) stood at 2.41 per cent while net NPAs were 1.11 per cent at the end of December 2023.

On January 27, the company announced its intention to sell the entire direct investment of 20 per cent of the fully paid-up equity share capital held in Shriram Investment Holdings Pvt Ltd (formerly known as Shriram Investment Holdings Ltd) to Shriram Ownership Trust (SOT), for a consideration of Rs 1,440 crore.

The transaction is subject to receipt of requisite regulatory approvals by SOT and expected to be completed before March 31, 2024, PEL had said in a separate regulatory filing.

The contribution of SIHPL in the revenue of the company for the year ended March 31, 2023, was nil, it had said.

"This transaction is aligned with our focus on monetising non-core assets. The proceeds from the transaction will further strengthen our balance sheet," it had said.

SOT is the promoter of Shriram Capital Private Ltd, which is the overarching holding company of Shriram Group.

Shriram Group offers a wide range of financial products in commercial vehicle financing, retail financing, chit funds, housing finance, life insurance, general insurance, stockbroking, distribution of financial products, and wealth advisory through its entities.