Piramal Enterprises seems to be in the eye of a storm today; from its close of Rs.885, it opened slightly lower a Rs.884.95 but soon slipped down to Rs.851.40, down 4%.

The company announced today morning details of its and its subsidiaries exposure in Alternative Investment Funds (AIFs).

The company said:

As of November 30, 2023, the value of investments by PEL and Piramal Capital & Housing Finance in AIF units was Rs. 3,817 crore.

(a). Rs. 653 crore of this pertains to funds that have no exposure to any debtor companies of PEL.

(b). Of the remaining Rs. 3,164 crore, Rs. 1,737 crore worth of downstream investments have been made by the AIF into 3 entities that are (or were in the last 12 months) debtor companies of PEL (consolidated).

(c). Taking a conservative view of the regulatory intent, PEL intends to adjust the entire Rs. 3,164 crore in its financial statements through capital funds or provisions.

The company is engaging with relevant stakeholders to finalize the details.

PEL has a consolidated net worth of Rs. 28,710 crores (September end 2023), and a capital adequacy of 31% and said that it is confident of full recovery of the underlying downstream investments in the impacted AIF units.

The company has received Rs. 905 crore so far as repayment of interest and principal on these units. It added that receivables on this fund accrue to PEL commensurate with its investment holding.