The Board of Directors of Piramal Enterprises Ltd (PEL) on Thursday approved a composite scheme of arrangement providing for the demerger of the pharmaceuticals business and simplification of the company’s corporate structure.
As per the decision the pharmaceuticals business will get vertically demerged from PEL and be consolidated under Piramal Pharma Ltd (PPL). Post the demerger, PPL will become one of the large pharma companies listed on NSE and BSE.
The two operating subsidiaries (wholly-owned by PPL) will also be amalgamated with Piramal Pharma to further simplify the Pharma corporate structure.
On the other hand PHL Fininvest Private Ltd the non-banking financial company (NBFC) will be amalgamated with PEL to create a large listed NBFC. The merged Housing Finance company, post the DHFL acquisition, will remain a wholly-owned subsidiary of PEL.
As per the demerger scheme shareholders of PEL will get 4 (four) shares of PPL for every 1 (one) share in PEL, in addition to their existing holding in PEL.
The demerger is subject to shareholders, creditors and regulatory approvals.
Ajay Piramal, chairman, Piramal Group 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…It will firmly empower both entities to be future-ready and enable them to independently pursue their growth strategies with sharper focus and identity.”
PEL will get transformed into a large listed diversified NBFC, focused on retail and wholesale financing, with a consolidated loan book of ₹65,000 crore.
“Piramal Pharma will be a large India-listed pharma company with proven capabilities in Contract Development & Manufacturing, global distribution of complex hospital generics, and a large geographic footprint in the consumer products market in India,” he added.
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