Piramal shares to trade ex-demerger on Tuesday

Piramal Enterprises has secured the approval of the National Company Law Tribunal (NCLT) for the demerger of its pharmaceutical business and the simplification of its corporate structure, the company said in a regulatory filing.

With the approval in place, Piramal Enterprises (PEL) can proceed with its plans to have two separate listed entities — PEL, a non-banking financial company, and Piramal Pharma (PPL), it added.

Piramal Enterprises is looking to hive off its pharma business and list it separately on both BSE and National Stock Exchange (NSE).

The record date for the demerger of the pharma business from the finance business has been set as September 1, 2022, and stock will trade ex-demerger on Tuesday as the markets will remain shut on Wednesday on the account of Ganesh Chaturthi.

Also, all the derivative contracts of the stock will expire today and new ones will be issued from Tuesday. However, the pharma entity will be listed in the third quarter of the ongoing fiscal year.

Investors will be allotted four shares of Piramal Pharma (PPL) for every one share of Piramal Enterprises (PEL) held in their demat account. If any investor wants to reap the advantage of the demerge can buy the stock on Monday to get the delivery of shares.

After the demerger, promoters will hold a 44 per cent stake in Piramal Enterprises, whereas the remaining 56 per cent stake will remain with the public and other shareholders.

Similarly, promoters will own a 35 per cent stake in Piramal Pharma, the upcoming listed entity, whereas Carlyle will hold a 20 per cent stake. The remaining 35 per cent equity will be owned by other shareholders of the new business.

Piramal’s financial business contributed about 52 per cent of the revenue of the company in the financial year 2021-22, whereas the remaining 48 per cent of revenue came from the pharmaceutical business.

In July this year, PEL said it had also received RBI approval for the NBFC licence. Subsequent to the demerger, PEL said as an NBFC it will have a loan book of $9 billion, while the pharma firm will be a significant player with revenues of $1 billion.

The company reported an 8 per cent decline in the consolidated net profit to Rs 496.09 crore despite a 22 per cent increase in net sales to Rs 3,548.37 crore in the quarter ended on June 30, 2022, on a year-on-year comparison.

Shares of Piramal Enterprises traded about a per cent lower at Rs 1,953.60 on Monday.