Piramal Enterprises Limited, through its subsidiary Piramal Finance Limited, has financed INR 400 crore to Hema Engineering Industries Limited (Hema). Proceeds from this loan will be used to refinance existing term lenders and fund the company’s capex plans. The deal was made through Corporate Finance Group (CFG), erstwhile Structured Finance Group, of Piramal Finance Limited. Gurgaon based Hema Engineering is a 2 wheeler focused Tier-1 vendor of fabricated components to clients like Hero, TVS and Royal Enfield. It has 7 existing manufacturing facilities across India and 4 new facilities are expected to commence in the current financial year.
Khushru Jijina, Managing Director, Piramal Finance Ltd. said, “Having committed to an in-depth study of the auto components space in the months leading up to our recently announced deals in the sector, we are pleased to now complete our third transaction within a span of just 6 months. The industry has grown at 15 per cent CAGR over the last 10 years, higher than the OEMs and continues to grow at a healthy pace. We draw comfort from Hema's long standing relationship with major OEMs including its top 3 customers i.e. Hero MotoCorp, TVS, Royal Enfield and look forward to a long and mutually beneficial association in the years to come.”
Chandresh Jajoo, Managing Director, Hema Engineering said, “We are pleased to have initiated a relationship with Piramal given their ability to be a true longer term growth partner for our business. The funding comes at an opportune time coinciding with a significant ramp up in our operations as 4 new plants are due to commence in the current year with an additional plant planned for next year. The funding structure from Piramal Finance offers a comprehensive solution for us to complete the current capex cycle, rationalise debt repayments and ensure an overall balanced cash flow.”
Corporate Finance Group (CFG) has diversified over time both in terms of sector and in offerings. CFG is now sector agnostic and offers capital across the risk curve including senior debt, acquisition finance, promoter finance, private equity exits alongside its previous focus on mezzanine investments. Though infrastructure which includes roads and renewables has been the focus so far, recently the group has also funded corporates in cement, entertainment, security management, packaging and more recently, the auto components and logistics space.