Piramal Pharma hits 5% lower circuit on listing

Shares of Piramal Pharma received a lackluster response from investors on its listing day, with the stock price falling as much as 5% on the Bombay Stock Exchange (BSE). The shares of Piramal Pharma were listed at BSE and NSE today following the demerger of Piramal Enterprises (PEL), one of the leading companies in India with a presence in financial services and pharmaceuticals business, in two separate listed entities - Piramal Enterprises and Piramal Pharma. While Piramal Enterprises focuses on the NBFC business, Piramal Pharma caters to the pharma segment.

Shares of Piramal Pharma opened at ₹201.80 on the BSE, and at ₹200 on the National Stock Exchange (NSE). Post listing, the stock declined 5% in intraday trade to hit a lower circuit of ₹191.75 on the BSE. In a similar trend, Piramal Pharma share price touched an intraday low of ₹190 on the NSE. There was a spurt in volume trade as a total of around 53 lakh shares changed hands over the counter on the BSE and the NSE, while market capitalisation stood at 22,881.9 crore by 12:20 pm.

In a regulatory filing on BSE, Piramal Pharma said that its equity shares would be listed and admitted to dealings on the exchange in the list of 'T' group of securities.

In August this year, Ajay Piramal-owned PEL had announced the demerger of its pharmaceuticals business after receiving all requisite approvals. The board of the company had approved the demerger of the pharma business and the simplification of the corporate structure 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.

The demerged entities intend to focus on accelerating growth, resulting in likely improvement in their performance in the coming years. In consideration of the demerger, shareholders of PEL were offered 4 equity shares of ₹10 each of Piramal Pharma for every 1 equity share of ₹2 each in PEL, in addition to their existing holding in PEL.

Post demerger, Piramal Enterprises aims to become 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.

Meanwhile, the pharma company will be a large listed entity in the pharmaceutical sector with revenues of nearly $1 billion. It offers a portfolio of differentiated products and services through end-to-end manufacturing capabilities across 15 global facilities and a global distribution network of over 100 countries. It includes Piramal Pharma Solutions (PPS), an integrated contract development and manufacturing organisation; Piramal Critical Care (PCC), a complex hospital generics business; and the India consumer healthcare business, selling over-the-counter products. In addition, it has a joint venture with Allergan, a leader in ophthalmology in the Indian formulations market. In October 2020, the company received 20% strategic growth investment from the Carlyle Group.