Piramal Capital Sells Santacruz Property for Rs.187 Crore

Piramal Enterprises Ltd’s (PEL) subsidiary, Piramal Capital & Housing Finance Ltd (PCHFL), has completed the sale of a prime property located in Santacruz East, Mumbai. The deal, finalized yesterday, on September 26, 2024, involves land and building assets sold to Shoquba Realty Private Ltd for a total of Rs.187 crore, as confirmed in an exchange filing.

Transaction Details & Context

The sale was formalized through a deed of conveyance, indicating the transfer of ownership of both land and building. It is important to note that this transaction does not qualify as a related party deal, providing further transparency. Shoquba Realty, the buyer, now owns this stable asset located in one of Mumbai’s well-known areas.

PEL’s Q1FY25 Performance

While the sale brings in additional liquidity for Piramal Capital & Housing Finance, PEL itself is struggling with challenges. For Q1FY25, the company reported a significant drop in profits. Its standalone net profit stood at Rs.228 crore, a sharp decline of over 60% compared to Rs.577 crore in the same period last year. Revenue from operations also fell by over 50%, coming in at Rs.545.20 crore, down from Rs.1,150.39 crore in Q1FY24.

In terms of net interest income (NII), PEL faced a 63% drop to Rs.348.2 crore compared to Rs.949 crore a year ago. Despite these numbers, the company’s total assets under management (AUM) grew by 10% year-on-year, reaching Rs.70,576 crore. Shares of Piramal Enterprises saw a positive market reaction to the transaction, closing at Rs.1,087.00, up by Rs.19.00 or 1.78%.

Conclusion: In conclusion, this sale of the Santacruz property to Shoquba Realty provides a financial boost to Piramal Capital & Housing Finance amidst challenging financial times. The transaction brings out the company’s ability to unlock value from its assets, even as its core operations face headwinds in terms of profit and revenue.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.