Piramal to list distressed debt fund

The fund management arm of the Indian conglomerate plans to raise money for investment in distressed and turnaround situations sourced from the sale of bad loans by Indian banks.

 Piramal is set to list a 6,000 crore rupee ($885 million; €820 million) fund to invest in distressed loans.

A spokeswoman for the Indian investment firm controlled by billionaire Ajay Piramal said that the timing for investment in distressed and turnaround assets was ripe as domestic banks seek to deal with the significant volume of non-performing loans they carry on their balance sheets.

She added that the new bankruptcy code would introduce time and cost efficiencies enabling lenders to deal with problematic loans.

Indian bank balance sheets include on average 11 percent non-performing assets. The government and the Reserve Bank of India led by Governor Raghuram Rajan have introduced a series of reforms aimed at breaking down the country’s institutional restrictions on credit provision.

The new bankruptcy code has cross-party backing and is due to pass in February.

Piramal Capital has appointed Nirmal Gangwal as managing partner of the new fund, the spokeswoman said. Gangwal founded Brescon Corporate Advisors and has long experience in restructuring over 200 deals in the last 15 years.

Piramal Capital, the group’s fund and asset management arm, manages more than 22,000 crores rupee of assets across real estate, infrastructure and other special situations strategies. 

The Piramal Group which has a long history of partnership with institutions of global repute such as CPPIB, APG, Warburg Pincus, Goldman Sachs, Apax, GIC and CVC, to name a few, will be the key sponsor and will manage an initial corpus of over $1 billion, through a fund or co-investment structure.

In 2014, Piramal concluded separate tie-ups with two large international institutional investors, Canada’s CPPIB and the Dutch pension manager APG Asset Management.

With CPPIB, both parties committed $500 million for mezzanine investment in residential real estate. The pension’s structured finance division, which makes mezz investments in the infrastructure sector, teamed up with APG to invest $1 billion over three to four years.