NCLT paves way for Piramal Enterprises and Piramal Pharma demerger

National Company Law Tribunal (NCLT), on Friday, approved the demerger of Piramal Enterprises' (PEL) pharma business and the simplification of its corporate structure. The Piramal Group’s Board had already approved the demerger of the enterprises' pharma business and the simplification of the corporate structure in October 2021.

The NCLT order has now paved the way toward the creation of two separate listed entities - Piramal Enterprises Limited (NBFC) and Piramal Pharma Limited, the group revealed in its regulatory filing to the stock exchanges.  

Ajay Piramal, Chairperson of Piramal Enterprises, said in a statement: “The approval from the Honourable NCLT on the demerger of our Pharma business and the simplification of the corporate structure is a significant milestone. We are on track to achieve the completion of demerger and separate listing of Piramal Pharma by the third quarter of the current financial year."

The company, in connection with the composite scheme of the arrangement, had already obtained consent from RBI, SEBI, stock exchanges, and clearances from our creditors and equity shareholders.

The demerger is expected to create one of India’s large listed diversified non-bank financial companies (NBFCs), with a loan book of around $9 billion and would also have a significant presence across retail and wholesale financing.

After the demerger, both Piramal Enterprises and Piramal Pharma's performance is projected to improve over the next several years since they will be more focused and able to pursue quicker expansion, the statement added. In exchange for the demerger, PEL shareholders will receive 4 shares of PPL in addition to their current holding of PEL for every 1 share of PEL.

"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,” Piramal added.