India's Piramal Enterprises posts surprise Q3 loss on provisions for AIF exposure (updated)

Piramal Enterprises

29/01/2024 11:08

(Updates with details throughout, adds share price in paragraph
11)
       MUMBAI, Jan 29 (Reuters) - India's Piramal Enterprises
 PIRA.NS  on Monday posted a surprise loss in the third quarter
as it set aside more funds as provisions to cover its exposure
to alternate investment funds (AIF).
    Consolidated net loss stood at 23.78 billion rupees 
($286.11 million) for the quarter ended Dec. 31, compared to a
profit of 35.45 billion rupees a year earlier.
    Analysts had expected the company to report a net profit of
1.47 billion rupees, as per LSEG data.
    During the quarter, the group made a regulatory provision of
35.4 billion rupees with regard to its investments in AIFs as
per the Reserve Bank of India's (RBI) mandate.
    Last month, the RBI tightened rules for lenders, including
banks and non-bank finance companies, from investing in AIFs.
    As per the RBI's rules, regulated entities must liquidate
their investments in AIFs within 30 days should the fund invest
in an existing borrower. Failure to comply mandates the entity
to make full provisions on these investments.
    "The group remains confident of full recovery of its AIF
investments," Piramal said in an exchange filing.
    As of Nov. 30, the value of investments made by the company
and Piramal Capital and Housing Finance in AIF units was 38.17
billion rupees, Piramal said last month.
    Consolidated revenue from operations fell to 24.76 billion
rupees in third quarter from 28.11 billion rupees a year
earlier.
    Total income also fell to 25.46 billion rupees from 28.67
billion rupees a year ago.
    Shares of the company ended 1.1% higher ahead of the
results.
    
($1 = 83.1160 Indian rupees)

 (Reporting by Siddhi Nayak; Editing by Sonia Cheema)
 ((Siddhi.Nayak@thomsonreuters.com; +91 22 6921 7848; Reuters
Messaging: Twitter: https://twitter.com/siddhiVnayak))