NCLT approves spin-off of pharmaceuticals business from Piramal Enterprises; what this means for both entities

NCLT Approves Spin-off of Piramal Enterprises Pharmaceuticals Business

The National Company Law Tribunal (NCLT) has given the green light to the proposed spin-off of the pharmaceutical business of Piramal Enterprises. The NCLT order now paves the way for the creation of two separate listed entities viz. Piramal Enterprises Limited (NBFC) and Piramal Pharma Limited.
The company‘s board had approved the split in October last year and the company subsequently obtained consent from the Reserve Bank, market regulator Sebi, stock exchanges and creditor and shareholder clearances for the program.
In July 2022, Piramal Enterprises Ltd (PEL) also received RBI approval for the NBFC license.

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The split entities will have greater focus and a greater ability to pursue accelerated growth, which will result in a likely improvement in their performance in the years to come. In return for the split, PEL shareholders will receive four PPL shares for every 1 (one) PEL share, in addition to their existing stake in PEL.

Piramal Enterprises Ltd Chairman Ajay Piramal said, “The Honorable NCLT’s approval of the spin-off of our pharmaceuticals business and the simplification of the corporate structure is a significant milestone. We are on track to complete the spin-off and separate listing of Piramal Pharma by the third quarter of the current fiscal year. »

The split creates one of the largest diversified NBFCs listed in India, with a loan book of nearly $9 billion.

“It will have a significant presence in retail and wholesale financing, leveraging technology. The pharmaceutical company will be a large listed entity in the pharmaceutical sector with revenues of nearly $1 billion. It offers a differentiated product and service portfolio through end-to-end manufacturing capabilities at 15 global facilities and a global distribution network of over 100 countries,” he added.

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