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IFC to offer $150 mn in debt funding to Piramal Capital
Photo Credit: VCCircle

International Finance Corporation plans to make a debt investment of $150 million (Rs 1,043 crore at current exchange rate) in mortgage lender Piramal Capital & Housing Finance Ltd.

The World Bank's private-sector investment arm said in a disclosure that the proposed credit line will be in the form of senior debt with a tenor of five years.

IFC will also help Piramal Capital mobilise up to an additional $200 million (Rs 1,390.7 crore at current exchange rate) through parallel loans, from elsewhere.

The wholly-owned unit of billionaire Ajay Piramal-led Piramal Enterprises Ltd will use the loans for lending to the retail housing finance sector, IFC said.

The financial services arm caters to both wholesale and retail segments. It provides loans to the infrastructure sector as well as small and medium enterprises (SMEs).

The financial services arm’s $11 billion conglomerate is engaged in other sectors such as healthcare and pharmaceutical as well as real estate.

As on 31 December 2018, Piramal Capital had an asset base of Rs 54,000 crore ($7.7 billion) and a loan portfolio of Rs 41,700 crore ($6 billion).

Piramal Enterprises' key external shareholders include East Bridge Capital Master Fund & I Ltd (6.3%), Life Insurance Corporation of India (3.48%) and Aberdeen Global Indian Equity Ltd (1.3%).  

IFC

IFC’s targeted financial-inclusion investments are primarily directed towards micro, small and medium enterprises (MSMEs), women-owned businesses, climate-related projects and housing finance.

Last week, VCCircle reported that IFC plans to extend Rs 900 crore ($125 million) to L&T Finance Ltd to help the non-bank lender expand its farm equipment financing portfolio.

Last month, VCCircle also reported that IFC plans to offer $35 million to DCM Shriram Ltd to help the agribusiness company expand a sugar factory and install a power plant. In the same month, IFC proposed to finance an affordable housing project of North India-based developer Signature Global.

Apart from lending to companies, IFC actively backs private equity and venture capital funds in India. It also has an active direct private equity-style investment practice in the country.

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