Piramal Enterprises hires 3 investment banks to raise Rs5,000 crore QIP
Investment banks Citi, Morgan Stanley and Kotak Mahindra Capital will conduct Piramal Enterprises’s QIP that could see the firm raise up to Rs5,000 crore
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Mumbai: Ajay Piramal-controlled Piramal Enterprises Ltd has appointed three investment banks to conduct an institutional share sale that could see it raise up to Rs5,000 crore, said two people aware of the development.
“Piramal has appointed investment banks Citi, Morgan Stanley and Kotak Mahindra Capital to help it raise up to Rs5,000 crore through an institutional share sale, which will be in the form of a qualified institutional placement (QIP),” said the first person cited above, requesting anonymity, as he is not authorized to speak with the media.
QIP is a capital-raising tool through which listed companies can sell equity shares, fully and partly convertible debentures, or any securities other than warrants that are convertible into stocks, to a qualified institutional buyer.
Piramal had last month informed the stock exchanges that it was seeking shareholder nod to raise up to Rs5,000 crore. The company has initiated a postal ballot for the same, the result of which will be announced on 16 June, the company said in its notification to stock exchanges.
“The QIP could be launched soon after the results of the postal ballot, though no timelines have been fixed yet for the launch. The roadshows for the QIP will begin shortly,” said the second person cited above, also requesting anonymity.
Funds from the QIP are planned to be used predominantly for the financial services business, though part of the proceeds will also go to the other two business arms, pharma and healthcare data analytics, the second person added.
According to an investor presentation dated 25 May, the financial services business contributed 39% to the group’s topline, while the pharma and analytics businesses contribute 47% and 14%, respectively.
The financial services business had a wholesale lending book of Rs24,975 crore as of 31 March. The financial services arm has also applied for a housing finance licence.
Other businesses under the arm include alternate asset management, where the group has partnered with marque global investors such as Canadian pension fund CDPQ, Dutch pension fund APG and American private equity investor Bain.
Spokespersons for Piramal Enterprises, Citi, Kotak Mahindra Capital and Morgan Stanley could not be immediately reached for comments.
Piramal Enterprises’s offer could be yet another major QIP this year, which has already seen several large QIP issuances, including that of State Bank of India Ltd, Kotak Mahindra Bank Ltd, Yes Bank Ltd and Hindalco Industries Ltd.
Earlier this week, SBI launched the country’s largest-ever QIP to raise Rs15,000 crore.
So far in 2017, 13 companies have raised over Rs31,000 crore through QIP issuances, while in 2016, 16 companies raised only Rs4,712 crore through the QIP route.
Piramal Enterprises shares ended unchanged at Rs2,804.35 on the BSE, while the benchmark Sensex dipped 0.19% to close at 31,213.36.