Mumbai: When billionaire Ajay Piramal bought a 20% stake and took management control in Shriram Capital in 2014, it was said that the move was part of Piramal group’s foray into retail lending, which would eventually lead to the merger of Shriram Capital with the financial services arm of Piramal Enterprise. Three years down the line, those plans seem to have changed with the proposed merger with IDFC. The Ajay Piramal-led Piramal Enterprises Ltd (PEL) currently holds an effective 20% equity stake—the single-largest shareholding—in Shriram Capital, an equity stake of 9.96% in Shriram Transport Finance Ltd(STF) and 9.98% in Shriram City Union Finance Ltd (SCUF). In a quick conversation with Mint at the sidelines of the merger press conference, Ajay Piramal discusses the road ahead for the two companies after the merger. Edited excerpts:

Ideally, shouldn’t IDFC merge with Shriram Capital and not the other way around, given that Shriram is much larger than IDFC?

IDFC already has a banking licence. All sides are committed to follow all regulatory requirements in letter and spirit. The decisions have been taken keeping in mind the core synergies of both the groups and the most favourable outcomes for all shareholders and customers of both Shriram group and IDFC.

When you had first invested in Shriram Capital a few years ago, there were expectations that Shriram Capital and Piramal Enterprise’s financial arms will eventually merge. Have those plans changed?

In some way this (merger) does not actually alter those plans. If somebody has those expectations, they can still happen.

There is a fear that the RBI is not comfortable giving banking licences to corporate houses. This merger may be seen as an attempt by you to enter the banking sector?

As far as Shriram Capital is concerned, we are strategic investors and we will continue to remain invested. All sides, which include Piramal Group, IDFC and Shriram are committed to following what the RBI says in this regard. Nothing is back-door and it is naive to assume this as the regulators will see through any such attempt.

If it comes to divesting some of your stake for this deal to pass through, will you do so?

Let’s not have a hypothetical situation. We will pass that bridge when it comes.

You have management control in Shriram Capital. Will that change once the merger takes place?

I am the chairman of Shriram Capital. You must remember that these are professionally-run organizations and we will define (our roles) in the days ahead.