Piramal Pharma gets locked in lower circuit

Piramal Pharma, recently demerged from , was listed on Wednesday. Its shares dropped 5% — the lowest permissible trading limit of the day — to close at 191.75 on the BSE. The stock was listed at 201.80 and fell 5% in the first 10 minutes of trade. Nearly 5.9 million shares exchanged hands on the BSE and NSE before the stock froze at the lowest designated price for Wednesday. The closing price is roughly a 10% discount to the fair value price assigned by some of the domestic brokerages.

“Piramal Pharma has been facing business headwinds over the past 15-18 months,” said

analyst Tushar Manudhane in a client note. “(But) we expect resource hiring to revive the CDMO business and the easing of Covid-related restrictions to drive the CHG segment.” The brokerage has a price target of 210. CDMO or contract development and manufacturing organisation, and CHG or complex hospital generics, are two of the four verticals besides India consumer healthcare business and the 49% joint venture with Allergan, the maker of Botox.
The Ajay Piramal entity’s listing follows the demerger from parent Piramal Enterprises (PEL) as part of an exercise to simplify its structure. Shareholders of PEL were entitled to four shares of Piramal Pharma for every share they held. The group made a re-entry into pharma 10 years after selling its healthcare business to NYSE-listed pharma giant Abbott Labs for $2.5 billion then.