‘We are not making a backdoor entry into the banking sector’
When billionaire Ajay Piramal took management control in Shriram Capital in 2014, it was said the move was part of Piramal group’s foray into retail lending and would lead to the merger of Shriram Capital with the financial services arm of Piramal Enterprise. Three years down the line, those plans seem to have changed with the proposed merger with IDFC. In an interview, Ajay Piramal discusses the road ahead. Edited excerpts: Ideally, should IDFC not merge with Shriram Capital and not the other way round, given that Shriram is larger than IDFC ? IDFC has a banking licence. All sides are committed to follow regulatory requirements in letter and spirit. The decisions have been taken keeping in mind the synergies of both the groups and the most favourable outcomes for shareholders and customers of both Shriram group and IDFC. When you first invested in Shriram Capital few years ago, there were expectations that Shriram Capital and Piramal‘s financial arms will merge. Have those plans changed ? In some way this (merger) does not alter those plans. If somebody has expectations, it could still happen. There is a fear the RBI is not comfortable giving banking licences to corporate houses. This merger may be seen an attempt by you to enter the banking sector? As far as Shriram Capital is concerned we are strategic investors and we will continue to remain invested. Nothing is backdoor and it is naive to assume this as the regulators will see through any such attempt.