Our Legacy business encompasses Wholesale 1.0 Lending and other non-core assets.
Led by its skilled team of professionals, PEL has been successfully reducing its Stage 2 and 3 assets to moderate the wholesale book size. In FY 2023-24, the Company took a strategic decision to further accelerate the rundown of its legacy business and lower the non-yielding proportion of the book. A smaller legacy book and a rapidly reduced Wholesale 1.0 AUM is also expected to benefit its cost of funds in the medium to long term.
The team continues to tirelessly work to monitor and execute the resolution strategy for complex recoveries and enforcement, aimed at improving recoveries and monetisation of assets.
PEL is using various tools for resolution of stressed assets including monetisation of underlying assets, one-time settlements, enforcement via IBC / other means and portfolio sales to ARCs in cash and / or Security Receipts (SRs).
The Company’s organisational structure has been revised to include separate origination, credit and asset management teams, Value Enhancement Group as well as control functions. This included creating independent teams and adding additional layers of credit assessment. A dedicated risk analytics team is responsible for monitoring the portfolio performance and detecting early warning signals.
Overall SR portfolio reduced 10% since Q1 FY 2023-24, led by cash realisation of ₹ 1,401 crore. The outstanding SR portfolio stood at ₹ 4,847 crore, with 33% of the outstanding SRs being retail loans. As resolution processes continue, the SR portfolio will keep reducing in the near term. Wholesale Stage 2&3 assets reduced by 33% YoY to ₹ 4,274 crore with PCR of 37%.
The Company holds 20% stake in each of the two holding companies namely Shriram GI Holdings Private Limited and Shriram LI Holdings Private Limited. Pursuant to this, the Company effectively owns 13.33% in Shriram General Insurance Company Limited and 14.91% in Shriram Life Insurance Company Limited.
During the year, as a part of its strategy to monetise non-core assets to strengthen its balance sheet, PEL sold its entire 20% stake in Shriram Investment Holdings Private Limited for ₹ 1,440 crore and its entire 8.34% stake in Shriram Finance Limited for ₹ 4,824 crore.
Copyright 2024 @ Piramal | All Rights Reserved.
