After Ajay Piramal (Piramal Enterprises Chairman) and Sanlam (South African insurer) came in, they were clear that we should be only in financial services and, thereafter, we were not making any new initiatives in the non-financial services. But this an old loan given, had to be continued.
But investors are worried...
There is nothing to worry, we don't see a problem and we have not been worried about it.
On the due date (June 2019) everything will be honoured. If not by SVL, it will be honoured by Shriram Ownership Trust (promoter of Shriram Capital, which is the holding company of Shriram group’s financial business). Trust valuation is estimated to be around Rs 200-300 billion, as it is a 45 per cent shareholder of Shriram Capital.
Do other group companies have an exposure to SVL?
The guarantee might have come today, because the loan was transferred to another entity. But the loan was in the book of STFC for around four years.
Some small amount would be in the books of SCUF (Shriram City Union Finance, another listed NBFC) also. There is no major investments into non-finance businesses other than this. There might be some Rs 10-20 million there.
Legally, SVL is not a Shriram group company, but morally it is. That is why probably the disclosure might not have been made earlier, specifically mentioning SVL. These are all decided by the professionals, we don't have much to say unless it is brought to the attention of the promoter.
Concerns are being raised on apprehensions that SVL might go for resolution under the Insolvency and Bankruptcy Code. Is there a possibility?
It is unlikely, unless we decide to put it there, which is also unlikely.
There are rumours that you and Piramal have differences in the way the Shriram group is run?
The relationship between Ajay Piramal and myself has been exceedingly good right from the day we started, and it will continue to be so. Possibility of things not going right between us is absolutely zero. So far, it has been smooth sailing in the relationship. I don't think there could be a better partnership than the one we have with him and the 100 per cent credit for that should be given to him only. His contribution to the success of this partnership is wholehearted and full.