SoftBank may call off $1 Bn investment plan in Piramal Group

Most often investment deals are done, when there is less of differences and more of agreements between both the parties involved. Similarly, when differences are more and fewer points to reach an agreement, it leads to nowhere.

And this seems to be the case in investment talks between SoftBank and Piramal Enterprises. After months of discussions for the investment of around $1 billion in Piramal Group's financial services arm, Masayoshi Son led conglomerate has failed to reach a consensus.

One of the major points of disagreement is reported to be Piramal Group's resistance to make a complete shift from wholesale loans to consumer lending. Japan-based conglomerate wanted Piramal to make a shift towards technology-based consumer lending with a timeline of 6-8 years to list new financial firm on BSE.

Piramal Group leadership team, on the other hand, was not in sync with a complete shift into consumer lending immediately and timeline said ET report quoting sources close to the development.

Piramal group has a total loan book size of Rs 56K crore, out of which real estate loans account for over Rs 40K crore.

However, another source close to the development said representatives of both entities still keep meeting, and the deal has been put on pause

Earlier, the investment talks between both the parties were first reported to have reached a final stage in July. The deal was also termed one of the unusual cases for SoftBank, which has stayed away from investing in listed firms.

For Piramal Group, the investment deal had significance as there has been already ongoing liquidity crisis in NBFCs and pressure to come up with a creative solution. The Mumbai-based firm is looking to raise large capital.

With SoftBank almost out of talks, the group is now said to be talking to the US and China-based PE firms.