Ajay Piramal has not earned a reputation for being one of the sharpest M&A minds for nothing. That said, the deal to acquire Dewan Housing Finance Limited (DHFL) must rank among the most complex, if not, certainly an extremely arduous one. In the making for at least 15 months, it pushed Piramal, chairman of the eponymous group, to the limit. He was up against bids from the likes of Oaktree, through its opportunities fund, and the Adani Group as well, notwithstanding interest evinced by the erstwhile DHFL promoter, Kapil Wadhawan.
Responding to a query from Business Today on the day of announcement of the conclusion of the buyout, Piramal said he had “a quiet sense of confidence” about the deal. In all, the total recovery amount was Rs 38,060 crore – split between Rs 34,250 crore paid by Piramal Capital and Housing Finance Limited (PCHFL) with another Rs 3,810 crore going to the creditors from DHFL’s balance sheet. The contours of the transaction have PCHFL merging with DHFL; in the process the new entity will be called PCHFL. “Most of the DHFL creditors are recovering nearly 46% through successful completion of the resolution process,” said a statement from the Piramal Group.
Opening up on the deal, he said there were five rounds of bidding. “Yes, it did take a long time but our understanding of the business did help. We used a lot of AI and ML as a part of the diligence process. Deep down, we knew this was a quality asset,” explained Piramal. Admitting his group’s successful track record with M&A was a huge plus, it did help in convincing the Committee of Creditors (CoC). It led to 94% of the creditors voting in favour of Piramal’s resolution plan. “In M&A, you do go through ups and downs and it was the case here as well. But I think we knew from day one that we would get it,” he added.
Though the focus is on an early and smooth integration of the DHFL business, Piramal said he was open to more inorganic opportunities. “Our debt-equity ratio stands at 3.5:1 and there is headway,” he said.
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