0

0

0

0

0

0

0

0

0

healthcare | IST

Piramal Enterprises demerges pharma business

Mini

Piramal Enterprises on Thursday 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.

Piramal Enterprises on Thursday 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 (PEL) and consolidate in Piramal Pharma, Piramal Enterprises said in a regulatory filing.
Now the demerger ratio is around four shares of Piramal Pharma for one share of Piramal Enterprises. Two subsidiaries will also be amalgamated with Piramal Pharma.
Now just to put it into perspective, the Piramal business in FY21 turnover was around 45 percent of sales and the pharma business revenue was around Rs 5,776 crore, EBITDA of around Rs 1,283 crore, margins at 22 percent.
Post demerger Piramal Pharma will be listed on the exchanges. No change in the shareholding pattern, so promoters will hold around 35 percent and investors 20 percent odd.
Piramal Pharma comprises of contract development and manufacturing which is around 62 percent of sales so majority of sales comes in from Contract Development & Manufacturing Pharmaceutical company (CDMO), complex hospital generics which is 29 percent of sales, consumer health business is 9 percent of sales and there is JV or joint venture with Allergan for ophthalmology.
One of the key things is they have cleared 36 US FDA inspections, 243 other regulatory inspections since FY12 successfully that is a feather in the cap for Piramal Pharma.
Since the Abbott deal, pharma revenue up 3.8x, EBITDA up around13x. EBITDA has improved from 7 percent to 22 percent. Remember, the company has also sold 20 percent to Carlyle in October 2020 as well. So, that is one investment that the street will look forward.
-With PTI inputs