India's Piramal Enterprises falls after RBI tightens norms for investment in AIFs

Piramal Enterprises

20/12/2023 05:08

** Shares of Piramal Enterprises  PIRA.NS  fall as much as
4.64% to 917 rupees 
    ** Drop after BRI tightened norms for investment in
Alternative Investment Funds (AIFs) by banks and non-bank
lenders
    ** RBI has banned the entities from investing in AIFs that
have invested in debtor firms where the lender has exposure in
previous 12 months
    ** PIRA and IIFL Finance  IIFL.NS  have exposure to AIFs,
which have exposure to debtor firms - Jefferies
    ** Estimates AIF exposure of 7% of AUM for PIRA and 2% for
IIFL
    ** "If PIRA and IIFL have to provide against their entire
AIF exposure, the hit to net worth could be -8% for IIFL and
-10% for PIRA," - Jefferies
    ** Adds exposure of banks to AIFs in its coverage universe
is nil/nominal
    ** IIFL shares fall as much as 1.34%, before trimming
losses; stock last down 0.5% - LSEG data
    ** PIRA shares up 11.4% in 2023, while IIFL rises 37.5%,
including today's gains
    

 (Reporting by Bharath Rajeswaran in Bengaluru)
 ((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))