Piramal Enterprises Ltd said on Thursday it has entered into a joint venture agreement with Bain Capital Credit India Investments to start its proposed assets reconstruction business.
The company will transfer a 50% stake in wholly owned subsidiary Piramal Assets Reconstruction Pvt. Ltd to Bain Capital Credit, it said in a stock market disclosure.
On completion of the transaction, Piramal Assets will seek regulatory approval to carry out the asset reconstruction business. The company has a net worth of about Rs 2 crore.
In August last year, billionaire Ajay Piramal-led Piramal Enterprises had announced its plans to enter this segment after scrapping a similar venture.
At the time, it had said that the platform would look at all sectors other than real estate as an asset class. It had also said that it would prefer to invest in businesses that require restructuring and had fundamentally strong growth prospects linked to India’s infrastructure and consumption needs.
The move came after the healthcare and financial services company ended a partnership with Nirmal Gangwal, managing director and founder of Brescon Corporate Advisory, to launch a fund with a corpus of Rs 6,000 crore for distressed assets.
Piramal Enterprises has named Shantanu Nalavadi, currently managing director at Piramal Bain Resurgence Fund, to lead the partnership with Bain.
The company also has strategic alliances with global funds such as APG Asset Management and CPPIB Credit Investment Inc.
According to a CRISIL analysis, banks may have to take a haircut of 60%, worth Rs 2.4 lakh crore, to settle 50 large stressed assets with a debt of Rs 4 lakh crore as of March 2017.