Pidilite Industries plans to set up lending business

Pidilite Industries Ltd (PIL) on Wednesday said it plans to set up a lending business, which will provide credit to its domain ecosystem to support its business growth.

Over the next two years, to build the new business, the company expects to invest up to ₹100 crores in tranches, through an optimum mix of equity and debt.

The lending arm will provide credit to the company’s domain ecosystem primarily in the form of small-value retail loans, the company said in an exchange filing.

Company Expansion

The company, which is one of the leading manufacturers of adhesives and sealants, construction chemicals, craftsmen products, DIY (Do-It-Yourself) products and polymer emulsions,  will foray into lending business through an existing NBFC “Pargro Investments Pvt Ltd. This NBFC belongs to the Company’s promoter group.

Pargro does not have any lending operations presently and is debt-free as of 31st October 2023, PIL said.

“Subject to all statutory and regulatory compliance, Pargro shall be acquired by the company through a wholly owned subsidiary under a Share Purchase Agreement (SPA) to be entered on or before 31st March, 2024.

“The acquisition of Pargro will be done at a fair value of up to ₹10 crore, which is equivalent to the liquid investments lying in Pargro’s books as of 31st October 2023, as per valuation done through an independent valuer,” PIL said.

The transaction will be completed post-execution of the SPA and necessary documents and upon obtaining the necessary RBI approvals.

Over the next two years, to build the new business, the company expects to invest up to ₹100 crores in tranches, through an optimum mix of equity and debt.

Meanwhile, PIL reported a 35 per cent y-o-y increase in second quarter standalone net profit at ₹455 crore. Courtesy: https://www.thehindubusinessline.com/money-and-banking/pidilite-industries-plans-to-set-up-lending-business/article67513363.ece