Fevicol-maker Pidilite to enter NBFC sector, offer small-value retail loans, says MD Bharat Puri

Pidilite, the makers of Fevicol, Dr Fixit, Fevikwik, and M-Seal, is entering into the NBFC sector by acquiring a promoter group firm Pargro Investments. Managing Director Bharat Puri said the new venture will not be a "big bang initiative" where Pidilite wants to be a large-scale business. The MD said they will provide small-value retail loans to the people related to its ecosystem, PTI news agency reported.

"It will remain restricted to the Pidilite ecosystem and service, where it believes to have a competitive advantage", Pidilite MD said in a virtual round table.

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"We are entering the NBFC sector for the Pidilite ecosystem. The Pidilite ecosystem consists of a set of large number of users and a large number of dealers. These users could be furniture contractors, plumbing contractors, masons, Kothi contractors, tile layers," he said.

"We are going to do this at arm's length," having no connection with the main business of the company, Puri added.

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Puri explained the reason behind the foray into the NBFC sector. The PIdilite MD said, "Our assumption is that this ecosystem needs small bursts of capital at certain periods of time which we are best equipped to service".

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Further Puri shared the roadmap of the new arm of the company. "We will start with piloting this in one geography, understanding whether our assumptions hold, how it works for us, and then come back and see how to scale it up if we want to scale it up," Puri said.

According to Puri, "We are clear that our maximum exposure over a two year period is 100 crores is what we are looking at and that is what we will stick to."

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

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"These are never going to be large loans," said Puri adding that it would be limited to the dealer contractor universe, therefore, not looking at large ticket items.

Earlier, Pidilite Industries had made a foray into the paints segment with the launch of Haisha Paints in select geographies.

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This week, Pidilite Industries reported a 35.76% increase in consolidated net profit to ₹458.53 crore for the second quarter ended on September 2023. Its revenue from operations was up 2.15% at ₹3,076.04 crore.