On Wednesday, October 19, 2022, shares of Piramal Pharma Ltd (PPLPharma ) made their stock market debut by listing on the exchanges at ₹201.8 apiece on the BSE and the pharma stock started trading at ₹200 per share on the NSE (to close @ 190 on day 1 ).
Piramal Enterprises (NS:) Ltd (PEL) demerging its pharma business post the board of the company had approved the demerger of the Pharma business and the simplification of the corporate structure in October 2021. Under the demerger scheme, the company said four (4) fully paid-up equity shares of PPL of ₹10 each to be issued to PEL shareholders for every one (1) fully paid-up equity share in PEL with the face value of ₹2 each held by them.
Lately, Piramal Pharma Ltd (PPL) said that it has received approval from the Securities and Exchange Board of India (Sebi) to list shares on the domestic stock exchanges BSE and NSE.
In August this year, the National Company Law Tribunal (NCLT) approved the demerger of Piramal Enterprises’ Pharma business and the simplification of the company’s corporate structure.
Past Key Financials (as per Q2)
The company reported consolidated net sales of Rs 3726.46 crore for the quarter ended 30-Jun-2022, down 15.33 percent from the previous quarter’s Rs 4401.03 crore and down 23.74 percent from the year-ago quarter’s Rs 3011.6 crore. The net profit for the quarter stood at Rs 496.09 crore, down 8.03 percent from the corresponding quarter last year.
Shareholding pattern As of 30-Jun-2022,
DIIs held a 2.02 percent stake in the firm, while foreign institutional investors held 34.54 percent and the promoters 43.49 percent.
Valuation ratio
According to BSE data, the stock traded at a price-to-earnings multiple of 10.28 and a price-to-book ratio of 1.47. A higher P/E ratio shows investors are willing to pay a higher price because of better future growth expectations. The price-to-book value indicates the inherent value of a company and is the measure of the price that investors are ready to pay even for no growth in the business.
The demerger from PEL will firmly empower PPL to be future-ready and enable it to independently pursue its growth strategies with a sharper focus and identity.
PPL will continue to include
– Piramal Pharma Solutions (PPS),
– Piramal Critical Care (PCC) and
– the India Consumer Healthcare business, which sells over-the-counter products. It offers a portfolio of differentiated pharma products and services through end-to-end manufacturing capabilities across 15 global facilities and a global distribution network in over 100 countries.
Piramal Enterprises on Friday (23 September 2022) announced that its board has approved fundraising up to Rs 750 crore via non-convertible debentures on a private placement basis.
Conclusion
Post demerger we will need to analyze both the entities PEL and PPL Pharma and continue to build the ongoing case study on demergers and their effect on the companies involved in general. PEL has shown excellent support around the 800- 805 levels (which was breached only once) whereas PPL being the new kid on the block we need to wait for more concrete data like quarterly results
So, how will the Q3 result affect the stock price, and will the support be tested again… Awaiting corporate announcement (approx 27th October or latest by 1st week of November 2022).
Disclaimer: The above article is for self-educational purposes. Research conducted by students: G10 and Anant for learning purposes.
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Read More: Demerger of a Company, Now What? Ongoing Case Study of Piramal Enterprises