Inside The DHFL Deal

Brand familiarity and better relations with bankers and stakeholders tilted the balance in favour of Ajay Piramal, and against Oaktree Capital

- Pooja Sarkar

AFTER A LONG-WINDING BIDDING battle and legal letters slapped by contenders, billionaire AjaPiramal’s nonbanking financial company (NBFC) Piramal Capital and Housing Finance Ltd emerged as the winner to acquire the assets of Dewan Housing Finance Corporation Ltd (DHFL).

On January 15, past 8 pm, the outcome of the e-voting started trickling in, and the results of the resolution were finalized. Piramal Capital received 93.5 percent votes, while 6.5 percent of voters abstained, said a person familiar with the matter. Oaktree Capital, the global stressed asset fund that has been eyeing DHFL since it started faltering in 2019, managed to get 45 percent votes. This means nearly half of those who voted for Piramal also voted for Oaktree.

In November 2019, the Reserve Bank of India (RBI) referred DHFL, the third-largest pureplay mortgage lender, to the National Company Law Tribunal (NCLT) for insolvency proceedings. After a voting process that ran for over 18 months, a range of voters—it included a consortium of banks, bondholders, and mutual funds—completed the process. Fixed deposit holders abstained from voting. On January 21, DHFL shares closed at ₹28.75 per share, down 4.96 percent, on the Bombay Stock Exchange.

WHAT TILTED VOTERS TOWARDS PIRAMAL?
According to a voter, one of the key reasons for choosing Piramal Capital is that it is a local entity with a presence in building real estate, and an existing NBFC, which will make regulatory approvals easier. After all, the transaction needs the blessings of all parties, especially the central bank.