Piramal Enterprises drops more than 4% after company shares ambitious growth plan at Investor Day meet

Shares of Piramal Enterprises dropped more than 4 per cent on BSE on Tuesday, a day after the company shared a positive outlook and growth plan. The financial services arm of the Piramal Group unveiled an ambitious vision to cement its position as a leading NBFC with a dominant presence in housing finance, while also aiming to expand its foothold in other product segments to create a diversified retail portfolio. An essential part of the NBFC’s strategic vision is achieving a consolidated core return on asset (RoA) ranging from 3 to 3.3 per cent and a leverage ratio of 3.7 times by FY28. These objectives hinge on an enhanced net interest margin (NIM) profile, controlled operational expenditure ratios, and the realisation of steady-state credit costs averaging between 1.7 and 1.8 per cent.

Piramal Enterprises management outlined its goal of doubling the lending asset under management (AUM) to reach Rs 1.2-1.3 lakh crore by FY2028. This growth trajectory envisions a 70:30 mix between retail and wholesale lending segments. This plan translates to a retail AUM compound annual growth rate (CAGR) of 23 per cent and an overall AUM CAGR of 15 per cent between FY23 and FY28.

Piramal Enterprises share price drops more than 4%

The NBFC stock price dropped 4.63 per cent, hitting a low of Rs 1,055.35 apiece on BSE in intraday trade on Tuesday. Shares of the company have gained more than 36 per cent in the past three-month period and over 27 per cent so far this year.

However, the stock has lost more than 45 per cent in the past one year.

Shares of Piramal Enterprises were trading 4.29 per cent lower at Rs 1058.90 apiece on BSE at 1:55PM on Tuesday.

Piramal Enterprises Share Buyback offer opens on August 31

Piramal Enterprises recently unveiled plans to buyback up to 1.4 crore equity shares. The share buyback amounting to Rs 1,750 crore will open on August 31 and close on September 6. According to the company, share buyback will be completed on a proportionate basis through the tender offer route.

The designated record date for shareholder eligibility was set as August 25. The company has fixed Rs 1,250 per share for the buyback, implying a premium of 18 per cent over current market price. Notably, the promoters and promoter group of Piramal Enterprises will abstain from participating in the buyback offer.