They havenât announced the demerger date yetâŚhave they?
demerger will take around 12 monthsâ time, Ajay Piramal had said earlier. So we can expect Piramal Pharma to be listed by the middle of 2022.
corporate actions like demergers need court approval and this takes time.
shiv kumar
PCHFL will provide solutions like Buy Now Pay Later (BNPL) for consumers and merchants, multi-collateral loans for retailers, supply chain financing, hospital financing, invoice discounting, among others.
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Jairam Sridharan, Managing Director, PCHFL said, âThis partnership is in is line with our strategy of expanding our retail portfolio through a mix of collaboration-led origination model and leveraging our distinguished digital lending capabilities. We look forward to a profitable and long-term partnership with API Holdings.â
I dont know if Buy Now Pay Later is a good strategyâŚthey are almost loss making everytime
If anyone hasnât seen what has happened in Australia recentlyâŚHere it is
Not sure how BNPL is different as a concept from credit card. These companies offer credit digitally without the need to send physical cards.
I believe BNPLs fail because of poor underwriting skills, low scale of operation combined with A&P burden.
Personally, I have used many BNPL providers and found that their approval is totally based on credit score. No one asks for salary slips or ITR return statements. Some even offer small credit limits to persons without credit history. All these point towards weak / zero underwriting which is probably why most BNPL companies fail.
Also, there is now a large number of BNPL companies and there is actually very limited entry barrier to customer acquisition. As such, these companies need to spend on A&P to create brand awareness, which further adds to their burden.
Further, these companies donât charge any joining (except Mobikwik) and ongoing fees, and charge lower penalty / interest rates for failing to repay.
On the other hand, they offer low / nil rewards, 15 days repayment cycles (except Amazon Pay Later, PostPe, Paytm Postpaid) & 5 days grace period.
They add value by making credit available in most places. They integrate their payment options in payment portals (ex: Lazypay, Simpl). A few offer UPI scan & pay credits, and credit UPIs (ex: Lazypay). Some BNPL companies even offer a digital credit card to allow seamless integration with every payment portals. One can even apply for physical credit cards in such cases (ex: PostPe).
Currently, well known banks like Yes Bank, RBL Bank, IDFC Bank and NBFCs like Aditya Birla Capital have enrolled as partners of the BNPL companies. Gradually, I hope with the entry of prudent players like Piramal, the profitability of BNPL will improve for better.
BNPL is a glorified version of personal loans. If you have a good credit score and if you take BNPL / and so called new age cards like (UNI) it will directly result in reduction in your credit score. Credit bureaus treat these as a unsecured loans. From last concall I heard PELâs ambition is to serve not so great credit worthy people and charge them more than market rates. Well till things are going great this will work but in case economic down cycles there will be heavy impact of this strategy. I am invested in PEL for demerger theme since lower level intend to get out once the demerger plays out.
For reference => Q2 FY22 concall
I want to reiterate that the housing business that we entered and that we are big in, is the lower end, the smaller town, the self-employed and cash salaried type of customers. Our average yield in the housing business, even today is 11%, so this is not the 6.5, 7.5, 8% housing business that banks do.
We are not in that business at all. We are targeting a completely different segment which is fairly underserved by banks, etc. And that is the business model that you are going to see us pursue in the foreseeable future
And as an organization, we have appetite for around 20% of unsecured lending in our portfolio. Now, it is not something that we are going to get to now or in the next one year or whereabouts, but overtime, slowly, directionally where we will head to make sure that we have an adequate earnings buffer in the P&L as well.
Now, in that direction, we are experimenting with a lot of different product categories, apart from plain vanilla unsecured personal loans, which of course is something that we will do digitally. But apart from that we have been drawing consumer BNPL in the quarters past. This quarter, we started merchant BNPL which is essentially merchants on a platform connecting with their buyers and at that platform we can actually offer a BNPL to the merchants. That is one thing that we are trying and on the unsecured BL, one of the things that you find in small-term, midtown India is that small merchants very often donât have collateral to actually offer, so to go ahead and do a lending relationship them you have to come up with an unsecured business loan,unsecured MSME lending product, which is what we have launched this quarter. It is purely focused on the MSME category and needless to say it is at a price point which is very different from what some of the other secured MSME lending like LAP etc., would be. So this would be about 500 basis points higher priced than what the LAP might be for example
Good interview of Ajay Piramal where he is talking about his relationship with Mukesh Ambani, ambition of having banking license, succession plan, life post retirement and more. A true leader :- 
News on Shriram group of companies getting reorganized on BSE - PowerPoint Presentation (bseindia.com)
Seems the PEL current holding will collapse into the listed company âShriram Financeâ as per slide 5.
SBCPL (Shrilekha Business Consultancy P Ltd) which is the investment vehicle (75% PEL holding, 25% Shriram Ownership Trust) holds 26.68% in Shriram Capital of the merging companies. This translates in PEL holding effectively 20% of Shriram Capital. PEL bought this stake for 2,014Cr in 2014. Also PEL holds 10% (or 65,79,840 shares) in Shriram City.
Per my rough calculations PEL will hold 17.23% in Shriram Finance. Can someone help to validate this % independently? [Edited 22nd Dec 2021- This will be 6.42% of SF, I had a mistake in earlier calculation, corrected that in the Google Sheets]
Not sure what is the total valuation of Shriram Finance, we need to calculate this.
- MCAP of Shriram City and Shriram Transport is 14K Cr + 40K Cr = 54K Cr. Shriram Capital is unlisted, so need to see the valuation report to get the amount.
- Combined AUM is 1.5Trillion Rupees, i.e. 1,500,000,000,000 or 150,000 Cr. How do we value from the AUM?
My Calculations Are here: ShriramAnalysis - Google Sheets
When he bought Shriram Capital(SCL) he also paid for the value of Shriram Genl insurance and Shriram Life Ins which was held by Shriram capital.Now the insurance companies will be spun off and SC will be merged into Shriram Finance.
What is the structure of the insurance cos and how will shareholders of SCL be paid for this holding which is going to be spun off.
Jairam Sridharan Interview with Financial Express
Following the DHFL acquisition, we are present across 300 branches. We want to have coverage of about 1,000 cities in the next three years, with physical presence in about 500-600 cities. In the next 12 months or so we expect to open another about 100 branches and then maybe 100-150 branches in the 12-15 months after that.
âWe like the BNPL business and are originating a lot of customers using this modelâ (msn.com)
Piramal Pharma acquires stake in Yapan Bio
PEL is paying 100 cr for a company which will have approx 20 cr revenue in FY22. That is they are valuing the business @400 cr. It is around 20 times sales⌠fairly expensive valuation.
Here is detail. It covers comprehensively about Yapan Bio.
Have you checked:
- If Piramal had these acquired capabilities previously.
- How many years would it need to grow into these.
- How are the peers trading.
- Market opportunity size in this segment.
Please share your views in this aspect.
Also please do share your views if any on Gene therapy,critical containment manufactured products and live vaccines. Thanks.
@vibhor_vaish Unfortunately I do not have any knowledge about the above segment, but I remember saying from the sage âYou do not not need a weighing scale to determine the lady/man is fatâ. 400 cr valuation to a company having 20 cr sales is anything but cheap. Hence I do not give any opinion.
However if you have any other material/view please share- we are here to share and increased our mutual understaning.
There is another way to look at it.
Yapan might have some interesting capabilities with capable entrepreneurs running the show. They might lack capital for scaling the business. Also, there might be customer level & capability level synergies.
Even if we take existing networth as 0, post issue networth will be 100cr so, effectively entire business is at 4X P/B . Such massive equity infusion can do wonders for high growth potential business with small Balancesheet.
Just to correct the facts, Piramal invested 101.77 crore for 27.78% stake in Yapan, which gives it a valuation of 366 crore. Yapan registered 12 crore sales in H1â22 and expected to register atleast 25 crore (if not more) for entire year. So, that is around 14.5 P/Sales, and not 20 P/Sales as you put it. Considered the niche futuristic skills and headstart that would give Piramal, i guess its a fair buy. Also they might have acquired it for the people too (sort of âacquihireâ)