The National Company Law Tribunal (NCLT) on Friday approved the demerger of Piramal Enterprises’ pharma business and the simplification of its corporate structure. Piramal Group’s board had already approved the demerger of the companies’ pharma business and the simplification of the corporate structure in October 2021.
The NCLT order has now cleared the way for the creation of two separate listed entities – Piramal Enterprises Limited (NBFC) and Piramal Pharma Limited, the group disclosed in its regulatory filing to the stock exchanges.
Ajay Piramal, chairman of Piramal Enterprises, said in a statement, “The approval by the Hon’ble NCLT of the demerger of our Pharma business and the simplification of the corporate structure is a significant milestone. We are on track to reach the completion of the demerger and separate listing of Piramal Pharma before the third quarter of the current financial year.”
In connection with the composite arrangement of the arrangement, the Company had already obtained consent from RBI, SEBI, stock exchanges and approvals from our creditors and equity shareholders.
The demerger is expected to create one of India’s major listed diversified non-bank financial companies (NBFCs) with a loan book of around $9 billion and will also have a significant presence across retail and wholesale finance.
After the demerger, both Piramal Enterprises and Piramal Pharma’s performance is expected to improve over the next few years as they will be more focused and able to pursue faster expansion, the statement added. In exchange for the demerger, PEL shareholders will receive 4 shares of PPL in addition to their current holdings of PEL for every 1 share of PEL.
“The pharma business will be a large publicly traded 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,” Piramal added.