The National Company Law Tribunal on Friday approved the demerger of Piramal Enterprises’ (PEL) pharma business and the simplification of the company’s corporate structure.
The order paves the way towards creation of two separate listed entities Piramal Enterprises Ltd (NBFC) and Piramal Pharma Ltd (PPL).
Ajay Piramal, chairperson of PEL said the company is on track to achieve the completion of demerger and separate listing of PPL by the third quarter of the current financial year.
PEL’s board had approved the demerger of the pharma business in October 2021.
Subsequently, in connection with the composite scheme of arrangement, the company has obtained consent from RBI, SEBI, stock exchanges, and clearances from its creditors and equity shareholders.
In July 2022, PEL also received the RBI approval for the NBFC license for PEL.
PEL said the demerged entities will have greater focus and ability to pursue accelerated growth, resulting in likely improvement in their performance in coming years.
In consideration of the demerger, shareholders of PEL will get four shares of PPL for every one share in PEL, in addition to their existing holding in PEL.
“The approval from the NCLT on the demerger of our Pharma business and the simplification of the corporate structure is a significant milestone,” Piramal said.
The demerger will create one of India’s largest listed diversified NBFCs, with a loan book of nearly $9 billion. It will have a significant presence across both retail and wholesale financing, leveraging technology at its core,” Piramal added.
The pharma company will be a large listed entity in the pharmaceutical sector with revenues of nearly $1 billion.
