Piramal Enterprises share price trades ex-demerger ahead of record date, what should investors know

Piramal Enterprises demerger latest update: Piramal Enterprises Limited (PEL) share price traded ex-demerger on Tuesday ahead of the record date. The stock gained nearly 9 per cent to touch the day’s high of Rs 1,141 per cent on the BSE intraday on the back of heavy volumes.  

The company’s board earlier in October 2021 had approved the demerger of Piramal Ent and Piramal Pharma as two separated entities. The former to handle financial services business and the latter to have a pharmaceutical business. 

At the market close, shares of PEL jumped over 1 per cent higher to Rs 1,062.75 per share on the BSE. The counter opened at the ex-demerger price of Rs 1,050 apiece on the BSE. 

Piramal Enterprises' demerger record date is September 1, 2022 and 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 of Piramal Enterprises Limited.    

Piramal Enterprises will have a financial services business, including retail and wholesale lending, while Piramal Pharma, which will be relisted on exchanges after the demerger, would have a pharma, and CDMO business, according to Zee Business research analyst Nupur Jainkunia. 

The pharma entity will be listed in the next 3-4 quarters of the ongoing fiscal year, the analyst said. 

On the book value of 1.3/1.4 times, Piramal Enterprises' share price comes to Rs 1415 per share with respect to FY24e and Piramal Pharma's share price comes to Rs 915 per share on 17 times EV/EBITDA on an average after factoring 20 per cent holding discount, Zee Business analyst  

The total share price value comes to Rs 2330 per share, which shows around an 18-20 per cent upside from the current market price, according to a research analyst.