Flipkart co-founder and tech entrepreneur Sachin Bansal has invested ₹200 crore in debt paper issued by Piramal Enterprises Ltd.
Bansal has subscribed to non-convertible debentures (NCDs) issued by Piramal Enterprises, which has business interests in pharma and financial services.
“The money will be used for the financial services business," said a person aware of the development, on the condition of anonymity. The NCDs that Bansal has subscribed to carry an interest coupon of around 9.5% and a repayment period of two years.
Piramal Enterprises declined to comment. Text messages sent to Bansal did not elicit a response.
Bansal’s loan to Piramal Enterprises follows investments by him in debt deals worth more than $100 million.
In February, Mint reported that the co-founder of e-commerce major Flipkart has invested ₹250 crore each, via debt, in non-banking financial companies (NBFCs) Altico Capital India Ltd and IndoStar Capital Finance Ltd. The investment was made through BAC Acquisitions Pvt. Ltd, the holding company Bansal started with investment banker Ankit Agarwal.
The debt investments in Altico and IndoStar marked a broad basing of Bansal’s investment strategy, who had till then largely invested his billion-dollar fortune in technology startups.
Last month, VCCircle reported that Bansal is investing ₹200 crore in debt paper issuance of another non-bank lender, Northern Arc Capital Ltd.
Collectively, across these four investments, Bansal has committed ₹900 crore in debt investments of corporate and lending institutions. He made more than $1 billion by selling his 5.5% stake in Flipkart during the $16 billion Walmart-Flipkart deal in 2018.
Mint reported on 21 February that Bansal plans to diversify his portfolio and double down on the financial services sector and is looking to make a big play in the venture debt space. Bansal may allocate several hundred crores of rupees for venture debt deals and look to route his investments through his newly formed holding company, BAC Acquisitions Pvt. Ltd, Mint had reported.
In May, Bansal invested $3 million each in debt in two scooter-sharing startups Vogo and Bounce.
Besides the debt deals, he has invested $100 million in Ola and has led a $51 million funding round in electric vehicle maker Ather Energy.
In April, Piramal Enterprises reported an 88% plunge in consolidated net profit to ₹456.24 crore for the fourth quarter ended 31 March, as compared with a consolidated net profit of ₹3,943.9 crore in the year-ago quarter.
Last month, Business Standard reported that Japan’s Masayoshi Son-led SoftBank is in the final stages of due diligence for investing $1 billion in Piramal Enterprises. The cash infusion will be used for the financial services arm of the group, which primarily deals in wholesale and corporate debt, a person in the know said, the newspaper reported.
The deal would peg the value of the financial services arm at more than $4 billion, according to the report. The investment is likely to be routed through SoftBank’s $100-billion vision fund, the report said.
Bansal’s investment and the talks with SoftBank come at a time when the non-bank lending sector has been facing a liquidity squeeze. Amid the liquidity crisis, rating agency Icra cut the ratings of bonds, term loans and debentures of Piramal Capital and Housing Finance Ltd from AA+ to AA stating that it expects NBFCs to find it difficult to mobilise resources at reasonable rates over the near to medium term, Mint had reported on 26 June.