Piramal Pharma to list on bourses on October 19 after demerger

Shares of Piramal Pharma will list on BSE and NSE on October 19 after the demerger from Piramal Enterprises during the second quarter of the ongoing financial year. Shares of Piramal Enterprises closed 0.18 per cent lower at Rs 804.45 on October 17, while the benchmark BSE Sensex settled 491 points, or 0.85 per cent, higher at 58,410. Piramal Enterprises in August said the company will issue 4 equity shares of Rs 10 each of Piramal Pharma for every 1 equity share of Rs 2 each to shareholders.

In a regulatory filing on BSE, the company said, "The equity shares of Piramal Pharma will be listed and admitted to dealings on the exchange in the list of T Group of securities."

ITC vs HUL: Which stock is a better pick in volatile market?

After selling its domestic formulations business (around 55 per cent of FY10 sales of Rs 3,670 crore) to Abbott (for $3.8 billion; 9x FY10 sales, 29x FY10 EBITDA) in 2010, Piramal has rebuilt its pharma segment to Rs 6,700 crore in sales in FY22 (around 4.4x of FY11 sales).

It currently operates in three key segments -Piramal Pharma Solutions (CDMO business) - integrated solutions across drug life cycle, Piramal Critical Care/ Complex Hospital Generics (CHG) - presence in high entry barrier complex hospital generics and India consumer healthcare/ OTC (ICH).

While sharing its view on Piramal Pharma in August, Axis Capital in a report said that the company's financials in recent past have been weak amid challenges in CDMO (attrition, raw material availability, logistic delays and customer led delivery schedule changes) and CHG (third party CMO supply constraints).

It further added that EBITDA margin was impacted by lower growth in high margin CDMO and higher packaging, raw material, logistic and operating costs.

"While recent execution challenges in CDMO and supply chain challenges in CHG remain in near term, we expect demerger to improve focus on CDMO (integrated offering across locations), CHG (high entry barrier business) and OTC (fast growing underpenetrated market)," Axis Capital said in a report.