Piramal Enterprises announced Friday evening that US-based investment firm Carlyle Group is buying a 20% stake in its pharma unit for around $490 million or Rs.3700 crore. This is one of the largest private equity deals in the country's pharmaceutical sector.
The company said that it will integrate its pharma businesses into its wholly-owned subsidiary Piramal Pharma, which will use the capital raised through the deal to accelerate its organic and inorganic growth plans.
The transaction is expected to close in 2020, subject to regulatory clearance.
This deal values its pharma business at an enterprise value of $2,775 million, with an upside component of up to $360 million depending on the company's performance in the current financial year. The company said that the final amount of equity investment will depend on the net debt, exchange rate and performance against the pre-agreed conditions at the time of closing of the deal.
The stock initially reacted positively to this news; opening over 1% higher at Rs.1357 and even rose to an intraday high at Rs.1363 but from there, it has been losing and went down as low at Rs.1303 and is now trading at Rs.1326 levels.