Piramal Enterprises shares trade ex-demerger; stock surges 9% intra-day

Shares of (PEL) were trading 9 per cent 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 per cent 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 an over five-fold with a combined 3.23 million equity shares representing 1.36 per cent of total equity of the company having changed hands on the NSE and BSE. In comparison, the S&P was up 1.2 per cent at 58,678 points.

The record date is fixed as September 01, 2022 for 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 is expected to get completed by Q3 FY23. While PHL Fininvest, which is the 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 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, has a target to expand its presence across 1,000 locations (with 500-600 branches) across India, in ‘phygital’ retail lending business.

The company has also plans to continue to build newer partnerships in its embedded finance business, resulting in 40-50 per cent growth in retail disbursements (on a CAGR basis). This will enable the company to double the overall AUM from FY 2022 levels, despite reduction in existing wholesale book, the company said in its FY22 annual report.

As regards to 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 per cent 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.

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