Bidding for the bankrupt Indian shadow lender was both a strategic and a platform-driven decision for the billionaire, who trumped competitor Oaktree Capital due to brand familiarity, and better relations with bankers and stakeholders
Image: Mexy Xavier
After a long-winding bidding battle and legal letters slapped by contenders, billionaire Ajay Piramal’s non-banking financial services arm, Piramal Capital and Housing Finance Ltd, emerged as the winner to acquire the assets of Dewan Housing Finance Corporation Ltd (DHFL).
On January 15, a little past 8 pm, the outcome of the e-voting started trickling in and results of the resolution were finalised. Piramal Capital received 93.5 percent votes and 6.5 percent voters abstained from voting, said a person directly familiar with the matter. Interestingly, Oaktree Capital, the global stressed asset fund that has been eyeing the asset since DHFL started faltering back in 2019, managed to get 45 percent votes, which means those who voted for Piramal, nearly half of them also voted for Oaktree.
In November 2019, the Reserve Bank referred DHFL, the third-largest pure-play mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings. After a voting process which ran for over 18 months, a range of voters---which included a consortium of banks, bond holders and mutual funds---completed the process. Fixed deposit holders abstained from voting. DHFL shares closed up 4.96 percent at Rs27.5 at the Bombay Stock Exchange on Monday. ​​
What tilted voters towards Piramal?
According to a person familiar with the matter, who voted as part of the process, said that one of the key reasons for voting for Piramal’s is that they are a local entity with a presence in building real estate and it also has an existing NBFC, which will make the regulatory approvals easier. After all, the transaction needs blessings of all parties, especially the central bank.