Shares of Piramal Enterprises (PEL) were trading 9 percent higher at Rs 1,141.75 on the BSE in Tuesday’s intra-day trade amid heavy volumes. The stock was trading ex-demerger of its pharmaceutical business with effect from today.
At 11:04 am; PEL was up 4 percent at Rs 1,091. The stock opened at Rs 1,050 (ex-demerger price) on the BSE vs its Monday’s close of Rs 1,935.
The trading volumes on the counter jumped over five-fold with a combined 3.23 million equity shares representing 1.36 percent of the total equity of the company that has changed hands on the NSE and BSE. In comparison, the S&P BSE Sensex was up 1.2 percent at 58,678 points.
The record date is fixed as September 01, 2022, for the issuance and allotment of 4 equity shares (Rs 10 each) of Piramal Pharma (PPL) for every 1 equity share (Rs 2 each) to shareholders of PEL.
In October 2021, the PEL’s board approved the demerger of the pharmaceuticals business and simplification of the corporate structure to create two industry-focused listed entities in Financial Services and Pharmaceuticals.
The demerger and subsequent listing of Piramal Pharma are expected to get completed by Q3 FY23. While PHL Fininvest, which is a non-banking financial company (NBFC), will be amalgamated with PEL to create a large listed NBFC in India.
PPL offers a portfolio of differentiated products and services through end-to-end manufacturing capabilities across 15 global facilities and a global distribution network in over 100 countries.
PPL includes Piramal Pharma Solutions, an integrated Contract Development, and Manufacturing Organization; Piramal Critical Care, a Complex Hospital Generics business, and the India Consumer Healthcare business selling over-the-counter products.
Meanwhile, over the next 5 years, Piramal Enterprises has a target to expand its presence across 1,000 locations (with 500-600 branches) across India, in the ‘phygital’ retail lending business.
The company also plans to continue to build newer partnerships in its embedded finance business, resulting in 40-50 percent growth in retail disbursements (on a CAGR basis). This will enable the company to double the overall AUM from FY 2022 levels, despite a reduction in the existing wholesale book, the company said in its FY22 annual report.
As regards Pirmal Pharma, the company said it has been investing organically and inorganically across all its pharma businesses.
“We believe that we will continue to deliver in line with our long-term growth track record through organic initiatives. In the medium-to-long term, we expect nearly 15 percent CAGR revenue growth across the businesses. As we grow revenues we expect to improve our operating margins through better-fixed cost absorption and therefore also improve our return on capital employed,” the company said.
