Piramal Finance Limited, which was created by the Piramal Enterprises-Piramal Capital & Housing Finance merger, is planning to wind down its housing finance segment. The strategic move comes amidst the company's larger restructuring move towards streamlining operations and enriching stakeholders.
Important Highlights:
Merger Background: The Piramal Enterprises-Piramal Capital & Housing Finance merger was done to meet RBI guidelines mandating listing for large financiers. Piramal Finance, the resultant entity, is looking to rationalize operations and enhance governance levels.
Business Restructuring: By divesting the housing finance business, Piramal Finance will concentrate on other areas of lending, riding out its diversified portfolio to achieve growth. This action demonstrates a strategic reorientation towards becoming more agile and responsive in its business approach.
Regulatory Compliance: Discontinuing housing finance is in consonance with RBI's Principal Business Criteria (PBC), where certain loan commitments to housing finance companies are mandated. Piramal Finance is switching its HFC license to an NBFC-ICC license to comply with regulations.
Future Prospects: The firm aims to increase its presence in other financial services, possibly venturing into new markets and products. This strategic shift sets Piramal Finance up for long-term viability and competitiveness.
During this transition, Piramal Finance will concentrate on maximizing shareholder value by streamlining its operational framework and capitalizing on its strengths in the financial industry.
Sources: Business Standard, Fortune India, GoodReturns