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Sunday, October 17, 2021

Piramal Demerger: Piramal Group announced the separation of pharma and financial services business, now two listed companies will be formed

Ajay Piramal, Chief of Piramal Group

A decade after selling its pharmaceutical formulations business to American pharmaceutical company Abbott Laboratories, the board of Piramal Enterprises (Piramal EnterPrises) has now announced that it will demerge the group’s pharma and financial services business. According to the group’s plan, its non-banking financial company PHL Fininvest will be merged with Piramal Enterprises ie PML. Larger NBFCs will stand out than this. After the acquisition of DHFL, the merged housing finance company will continue to be a subsidiary of PEL. Its entire financing will be done by PEL only. Shareholders of Piramal Enterprises Limited will get four shares of Piramal Pharma in exchange for one share.

Pharma business accounts for 48 percent of the group’s revenue

The turnover of Piramal Pharma in the financial year 2020-21 has been Rs 5776 crore and is among the top 15 pharmaceutical companies of the country. However, only 15 percent of its revenue comes from the Indian market. The majority of the company’s business comes from the North American market. Pharma business accounts for 48 per cent of the group’s turnover. The rest of the revenue comes from financial services. Piramal Group’s statement said that by separating the pharma and financial business, the focus will be on the management of both the companies. The liquidity of the shareholders will increase. With this, the risks of both the companies will not pass on each other.

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Market valuation of Piramal Enterprises Limited is Rs 68,887 crore

On Thursday (7 OCTOBER 2021), the shares of Piramal Enterprises Ltd rose 1.57 per cent to Rs 2,886. In this way the market valuation of the company has increased to Rs 68,887 crore. Piramal Pharma is engaged in Contract Development and Manufacturing (CDMO) business. It is included in the country’s three largest CDMO companies. Apart from this, it is also active in Complex Hospitals Generic Business, Consumer Healthcare. It has formed a JV with Allergan to create space in Ophthalmology.

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