Piramal Enterprises Ltd (PEL), which opened 2.5% higher at Rs.2957.30, the stock went on to hit an intraday low at Rs.2727.80. going down 5.5% to Rs.2727.80.
The market has not reacted positively to the Board’s decision to demerge its financial services and pharmaceuticals businesses into two separate listed entities.
As per the plan, the pharma business will get vertically demerged from the company and get consolidated under Piramal Pharma (PPL) while PHL Fininvest Pvt Ltd, the non-banking financial company (NBFC) will be amalgamated with Piramal Enterprises.
The merged housing finance company, post the DHFL acquisition, will remain a wholly-owned subsidiary of Piramal Enterprises.
Shareholders of Piramal Enterprises (PEL) will get four shares of PPL for every one share in PEL, in addition to their existing holding in PEL.
The company believes that this is great value unlocking. PEL will get transformed into a large listed diversified NBFC, focused on retail and wholesale financing, with a consolidated loan book of around Rs 65,000 crore.
Piramal Pharma will be a large India-listed pharma company with proven capabilities in Contract Development & Manufacturing, global distribution of complex hospital generics, and a large geographic footprint in the consumer products market in India. PPL’s Contract Development and Manufacturing (CDMO) business is one of the top three in India and the 13th largest globally.