Piramal Enterprises board approves demerger of pharma biz, simplification of corp structure

The merged housing finance company, post DHFL acquisition, will remain a 100 per cent subsidiary of PEL, the filing said.Piramal Enterprises will be one of Indias large listed diversified NBFCs with significant presence across both retail and wholesale financing, offering multiple retail products through a technology-driven platform, it added.

Piramal Enterprises on Thursday said its board has approved a composite scheme of arrangement providing for the demerger of its pharmaceuticals business and simplification of the corporate structure to create two listed entities in financial services and pharmaceuticals.

The pharmaceuticals business will get vertically demerged from Piramal Enterprises and consolidated under Piramal Pharma, the company said in a regulatory filing.

Following the demerger, Piramal Pharma will become one of the large pharma companies listed on NSE and BSE, it added.

''In consideration of the demerger, Piramal Pharma Ltd (PPL) shall issue 4 fully paid-up equity shares of PPL of Rs 10 each to the shareholders of PEL for every 1 fully paid-up equity share in PEL having a face value of Rs 2 each held by them, in accordance with the Share Entitlement Ratio,'' Piramal Enterprises Ltd (PEL) said.

Two operating subsidiaries wholly-owned by Piramal Pharma will also be amalgamated with Piramal Pharma Ltd to further simplify the pharma corporate structure, it added.

Piramal Group Chairman Ajay Piramal said, over the years, Piramal Enterprises has grown multi-fold with diverse businesses under one listed holding company structure.

''In line with our stated strategy, the board has approved the demerger and simplification of our corporate structure, to create two independent listed entities in financial services and pharmaceuticals, with a leadership position across the business segments they operate in,'' he added.

It will firmly empower both entities to be future-ready and enable them to independently pursue their growth strategies with sharper focus and identity, Piramal said.

''Piramal Pharma will be a large India-listed pharma company with proven capabilities in contract development and manufacturing, global distribution of complex hospital generics, and a large geographic footprint in the consumer products market in India,'' he added.

Piramal Pharma's contract development and manufacturing (CDMO) business is one of the top three in India and the 13th largest globally. PPL's complex hospital generics and India consumer healthcare businesses are well positioned with differentiated products and business models, Piramal said.

Regarding the financial services, ''the amalgamation of PHL Fininvest Pvt Ltd with PEL will create a listed non-banking financial services (NBFC) entity. The merged housing finance company, post DHFL acquisition, will remain a 100 per cent subsidiary of PEL,'' the filing said.

Piramal Enterprises will be one of India's large listed diversified NBFCs with significant presence across both retail and wholesale financing, offering multiple retail products through a technology-driven platform, it added. ''Piramal Enterprises 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." Our retail lending platform will be digitally-led, that will serve the financing needs of the under-served customers in the 'Bharat' market. With the recent acquisition of DHFL, the wholly-owned housing finance housing subsidiary has been significantly scaled to become one of the largest HFCs of our country, focused on affordable housing finance,'' Piramal said.

The demerger and simplification of the corporate structure will lead to the creation of separate sector-focused listed entities in financial services and pharmaceuticals, the company said.

Shares of Piramal Enterprises closed at Rs 2,886.40 per scrip on BSE, up 1.57 per cent from its previous close.

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