Piramal seeks new partner for $1bn stressed asset fund

MUMBAI: Billionaire Ajay Piramal is changing his partner for the stressed assets business. Piramal and Nirmal Gangwal, one of the country's oldest turnaround specialists, have called off their joint venture to set up a billion-dollar fund to acquire and manage financially stressed companies, sources directly familiar with the matter said.

Piramal has initiated discussions with TPG Capital, among others, to bring on board a global partner with proven M&A experience to jointly run the stressed assets fund. Meanwhile, Gangwal-led Brescon Corporate Advisors, which was supposed to manage the scrapped joint venture, is hitting the market to raise a $300 million fund for investment into stressed businesses. Among India Inc's most savvy and influential investors, Piramal's talks with TPG “are preliminary, ongoing and at the highest level“, said sources mentioned earlier. There is no agreement yet, but TPG could commit as much as $500 million, or half of the proposed fund. TPG and Piramal declined to comment, when contacted.

Brescon founder Gangwal confirmed the joint venture with Piramal was off, as both the parties mutually decided to explore other options. “We have been actively involved with the corporate debt restructuring and resolution process for decades now. It makes sense for us to raise our own fund,“ he said on phone responding to queries from TOI.

Several global investors have been attracted to the prevailing stressed assets opportunity after the Reserve Bank of India's asset quality reviews prompted banks to consider shedding bad loan portfolios. The stressed assets for the banking system rose to 14.5 per cent as of December last year.

If Piramal pulls off a deal with TPG, which has a history of working on corporate turnarounds, it will be yet another association with a marquee global investor. He has struck investment deals with Warburg Pincus, Goldman Sachs and Canadian Pension Plan Investment Board in recent past.

Ready to Master Stock Valuation? ET’s Workshop is just around the corner!