Pidilite Industries, a Manufacturer of Adhesives and Construction Chemicals, Ventures into Lending Business by Acquiring Promoter Group's NBFC Firm
Pidilite Industries is set to diversify into the lending business, with plans to offer small-value retail loans. The company intends to acquire Pargro Investments, an existing NBFC within its Promoter Group, as per a regulatory announcement.
Pidilite Industries Ltd. expressed its intention to establish a Lending Business, with an expected investment of up to Rs 100 crore over the next two years, funded through a combination of equity and debt. The new lending venture aims to provide credit to its industry ecosystem, primarily in the form of small-value retail loans. Pidilite, known for products like Fevicol, Dr. Fixit, Fevikwik, and M-Seal, is pursuing this strategic expansion.
The acquisition of Pargro will be carried out by Pidilite through a wholly-owned subsidiary, with the Share Purchase Agreement (SPA) set to be executed by March 31, 2024. The acquisition will be based on a fair valuation of up to Rs 10 crore, equivalent to the liquid investments held by Pargro as of October 31, 2023, assessed by an independent valuer. The transaction will be subject to compliance with statutory and regulatory requirements, and it will be finalized following the execution of the SPA and necessary documentation, along with obtaining the requisite RBI approvals.
Previously, Pidilite Industries had expanded into the paint segment by launching Haisha Paints in select regions. In the latest financial report, Pidilite Industries announced a 35.76% increase in consolidated net profit, reaching Rs 458.53 crore for the second quarter ending in September 2023, with a 2.15% increase in revenue from operations, totaling Rs 3,076.04 crore.
