Piramal Group on Thursday said Piramal Enterprises' demerger aims to make the company structure simpler and more focused.
In an interview with CNBC-TV18's Nisha Poddar, Ajay Piramal, chairman, said, "Many analysts and investors said there is a less synergy between financial services and pharma, so that is why we are doing the demerger. Both the businesses today are strong enough to stand on their own, not only now but in the future as well."
Piramal Enterprises said its board has approved a composite scheme of arrangement providing for the demerger of its pharmaceuticals business and simplification of the corporate structure to create two listed entities in financial services and pharmaceuticals.
The pharmaceuticals business will get demerged from Piramal Enterprises Ltd (PEL) and consolidate in Piramal Pharma, Piramal Enterprises said in a regulatory filing.
He said in the financial services space, the company aims to have 75 percent retail and 25 percent wholesale book in the long term, "Both the businesses, whether it is pharma or in financial services we have enough equity to grow."
"We have just completed for financial services probably the largest merger in the financial services space when we acquired DHFL. In financial services, our focus is to diversify our book and with the DHFL acquisition, our book will be 50 percent retail and 50 percent wholesale in the short term. In the long term, our focus would be to make it two-thirds of retail and one-third of wholesale," he added.
"On the pharma side in the last 12 months, we did three acquisitions, two in India and one in the US. Even now our debt to EBITDA is still a very conservative number and we will continue to grow that business both organically and through acquisitions," he said.
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