MUMBAI (Reuters) -India’s Piramal Enterprises on Monday posted a surprise loss in the third quarter as it set aside more funds as provisions to cover its exposure to alternate investment funds (AIF).
Consolidated net loss stood at 23.78 billion rupees ($286.11 million) for the quarter ended Dec. 31, compared to a profit of 35.45 billion rupees a year earlier.
Analysts had expected the company to report a net profit of 1.47 billion rupees, as per LSEG data.
During the quarter, the group made a regulatory provision of 35.4 billion rupees with regard to its investments in AIFs as per the Reserve Bank of India’s (RBI) mandate.
Last month, the RBI tightened rules for lenders, including banks and non-bank finance companies, from investing in AIFs.
As per the RBI’s rules, regulated entities must liquidate their investments in AIFs within 30 days should the fund invest in an existing borrower. Failure to comply mandates the entity to make full provisions on these investments.
“The group remains confident of full recovery of its AIF investments,” Piramal said in an exchange filing.
As of Nov. 30, the value of investments made by the company and Piramal Capital and Housing Finance in AIF units was 38.17 billion rupees, Piramal said last month.
Consolidated revenue from operations fell to 24.76 billion rupees in third quarter from 28.11 billion rupees a year earlier.
Total income also fell to 25.46 billion rupees from 28.67 billion rupees a year ago.
Shares of the company ended 1.1% higher ahead of the results.
($1 = 83.1160 Indian rupees)
(Reporting by Siddhi Nayak; Editing by Sonia Cheema)
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