New Delhi: Adhesive and construction chemicals manufacturer Pidilite Industries plans to enter the lending business, providing small-value retail loans.
To facilitate this, Pidilite Industries, would acquire an existing NBFC -- Pargro Investments, belonging to its Promoter Group, according to a regulatory update.
"Pidilite Industries Ltd, intends to set up a Lending Business," the company said.
Over the next two years, to build the new business, the company expects to invest up to Rs 100 crore in tranches, through an optimum mix of equity and debt.
"The new business would provide credit to its domain ecosystem to support their business growth. This credit will be provided primarily in the form of small-value retail loans," said Pidilite, the makers of Fevicol, Dr Fixit, Fevikwik and M-Seal.
Pargro will be acquired by Pidilite through a wholly-owned subsidiary under a Share Purchase Agreement (SPA) to be entered by March 31, 2024.
"The acquisition of Pargro will be done at a fair value of up to Rs 10 crore, which is equivalent to the liquid investments lying in Pargro’s books as on October 31, 2023, as per valuation done through an independent valuer," it said.
The acquisition would be subject to statutory and regulatory compliance, it added.
"The transaction will be completed post execution of the SPA and necessary documents and upon obtaining the necessary RBI approvals," said Pidilite Industries.
Earlier, Pidilite Industries, had made a foray in the paints segment with the launch of Haisha Paints in select geographies.
On Wednesday, Pidilite Industries reported a 35.76 per cent increase in consolidated net profit to Rs 458.53 crore for the second quarter ended on September 2023. Its revenue from operations was up 2.15 per cent at Rs 3,076.04 crore.