Piramal Enterprises posts surprise Q3 loss on higher provisions for AIF exposure

MUMBAI, Jan 29 (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 ₹2,378 crore ($286.11 million) for the quarter ended 31 December, compared to a profit of ₹3,545 crore a year earlier.

The company’s result was below estimates as the market expected the company to report a net profit of ₹147 crore.

During the quarter, the group made a regulatory provision of ₹3,540 crore 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 ₹3,817 crore, Piramal said last month.

Consolidated revenue from operations fell to 2,476 crore in the third quarter from ₹2,811 crore a year earlier. Total income also fell to 2,546 crore from 2,867 crore a year ago.

Shares of the company ended 1.1% higher ahead of the results.