Piramal Finance and IIFL in exploratory talks for an MFI deal: Sources

Piramal Finance

• Piramal Finance in talks to acquire IIFL Samasta's MFI business
• Deal could value IIFL Samasta at Rs 4,000–4,500 crore
• Valuations yet to be finalized; due diligence is ongoing

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Piramal Finance and IIFL Finance are said to be in early stage talks to strike a deal in the microfinance business. Sources aware of the deal talks say Piramal Finance is currently conducting due diligence on IIFL Finance’s MFI business, IIFL Samasta Finance.

"Talks between the two companies have been going on for a while. A deal seems to be in the making, though it is early to predict the outcome of these talks," said a banker who didn’t want to be named. EY is said to be conducting due diligence on IIFL Samasta.

The sources cited also say that the owners of the two groups have had a few rounds of discussions pertaining to the deal. “A considerable amount of information exchange has been happening between the two companies, and the top managements of both entities are in regular contact,” said a person aware of the deal talks, suggesting that negotiations seem to be heading towards a deal and conversations have lately become more serious.

IIFL Capital and DAM Capital are bankers to the deal, say sources.

Valuations undecided

With regards to valuations, it is expected that the deal could conclude at about 2.2 - 2.5 times the 12-month trailing price to book multiples. That said, people with knowledge of the transaction say there hasn't been an affirmative conversation of valuations till now. “Principally, Piramal and IIFL seem keen to take the talks forward. However, valuations is yet to be agreed upon.

It is possible that IIFL might seek higher valuations, given the green shoots in the MFI business, though Piramal is clear that past valuation multiples hovering at 3 - 3.5x price to book is off the table,” said a banker who didn’t want to be identified.

IIFL Samasta’s net worth stood at roughly Rs 1,800 crore as of December 31, 2025, translating to a deal value of about Rs 4,000 – 4,500 crore. The microfinance company’s loan book stood at Rs 6,600 crore in Q3 FY26, with a capital adequacy of 30 percent. The company posted a net profit of Rs 18.6 crore during this period versus a net loss of Rs 136 crore a year-ago.

An email sent to Piramal Finance seeking comment on deal talks remained unanswered.

“IIFL Finance and its subsidiaries, including IIFL Samasta, continuously evaluate various strategic opportunities in the ordinary course of business, including potential partnerships, capital raises, restructurings, and portfolio actions, with a view to enhancing long-term shareholder value and strengthening the franchise. However, as a matter of policy, we do not comment on market speculation, unverified reports, or ongoing exploratory discussions. If and when there is any material development that requires disclosure under applicable law and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company will make appropriate disclosures to the stock exchanges in accordance with regulatory requirements. We remain committed to the highest standards of governance, transparency, and regulatory compliance,” a spokesperson for IIFL Finance said in response to Moneycontrol’s query.

Why the deal is significant

For Piramal Finance, MFI has been an area of interest to expand its retail offerings in the last 3 – 4 years. With an MFI portfolio of Rs 1,340 crore as on Q3FY26, roughly a percent of its assets under management (Rs 97,000 crores as of December 31, 2025), acquiring IIFL Samasta would give a massive boost to Piramal’s expansion plans in this segment.

For IIFL Finance, the deal would directly bump up its tier-1 equity capital which has declined from 13.78 percent in FY25 to 12.76 percent in Q3 FY26.

Even for the MFI industry as a whole, the deal assumes importance as it would be the first major M&A transaction ever since the sector started grappling with asset quality issues from mid-2024.