Piramal Enterprises Ltd said on Thursday that its board has approved the restructuring of the company’s business to demerge its financial services and pharmaceuticals operations into two separate listed entities.
The pharmaceuticals business will get vertically demerged from Piramal Enterprises and consolidated under Piramal Pharma Ltd (PPL), the group said in a statement. Two operating subsidiaries will also be amalgamated with Piramal Pharma, to further simplify the pharma corporate structure.
PHL Fininvest Pvt Ltd, the non-banking finance company (NBFC), will be amalgamated with Piramal Enterprises to create a large listed NBFC, the group said. The housing finance company, which has acquired DHFL, will remain a wholly-owned subsidiary of Piramal Enterprises.
Shareholders of Piramal Enterprises will get four shares of PPL for every one share held, in addition to their existing holding in the parent company.
Piramal Enterprises chairman Ajay Piramal, in an interview to ET, said the demerger was done to simplify the corporate structure and is expected to unlock significant value for shareholders
“The shareholders wanted two independently run and focused companies rather than having a mixed financial services and pharma,” Piramal said. “Both these companies are well capitalised. There is runway for growth for both of them, through organic and acquisitions. Things will be much more transparent. Our shareholders will know what is happening in each company in detail.”
Pharma in focus
Nandini Piramal, the executive director of Piramal Enterprises, said Piramal Pharma is now in a position to scale up business. “We are a large pharma company again in India; we have the ability with Carlyle (investment) to do acquisitions as well as organic ground field expansion,” Nandini said.
