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According to a report published by FE, the shareholders of Piramal Enterprises have supported the proposed demerger of the company to simplify its corporate structure with an overwhelming majority of 99.9%.
The Piramal Group is a business conglomerate that is operating businesses in the fields of Pharmaceuticals, Financial Services, and Real Estate. Today, the company has offices in 30 countries with a brand presence in 100 global markets. It has two companies under it: Piramal Enterprises Ltd. & Piramal Realty Pvt. Ltd.
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Piramal Realty Pvt. Ltd. (PRPL)is the group's real estate development arm which manages both commercial and residential projects across Mumbai and Thane. PE firms Warburg Pincus and Goldman Sachs have invested ~US$ 235 Million in the company, making it one of the largest PE investments in Indian real estate.
Piramal Enterprises Ltd. (PEL) is the listed company of the group which has subsidiaries under it that operate in pharmaceuticals and financial services. Piramal Capital & Housing Finance Limited (PCHFL), a housing finance company registered with the National Housing Bank (NHB) is the financial services business of the group while Piramal Pharma Limited (PPL) is the group's pharmaceuticals business.
The earliest reference to the demerger was in September 2021, when the company had acquired DHFL for Rs 34,250 crores. The proposed plan was to separate the pharma business and consolidate it under PPL while two pharma subsidiaries- Hemmo Pharma and Convergence Chemicals -of the pharma business would be merged with PPL.
Moreover, PHL Finivest Pvt. Ltd. will be merged with PEL to consolidate the company's scattered financial services business. However, DHFL would continue to be a wholly-owned subsidiary of PEL. These steps are taken to simplify the complex corporate structure of the company upon investors' demand.
After the demerger, PPL will be listed on the bourses. PEL is currently listed on our bourses as it currently trades marginally higher at Rs 1,725 per share.
Article by Aman Agarwal.
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