Shares of Piramal Enterprises rose as much as 4.3% on Monday after US-based global investment firm Carlyle Group Inc said it will buy 20% stake in Piramal Pharma for around $490 million ( ₹3,700 crore).
After touching an intraday high of ₹1399.95 apiece on the BSE, the scrip closed at ₹1387.45, up 3.34% from its previous close, while the benchmark index, Sensex settled 0.6% lower at 34,961.52.
The capital raise will accelerate Piramal Pharma’s organic and inorganic growth plans, the Ajay Piramal-led Piramal Enterprises and Carlyle Group said in a joint statement on Saturday.
The transaction values the pharma business at an enterprise value (EV) of $2.775 billion (over ₹20,980 crore), with an upside component of up to $360 million (over ₹2,720 crore) depending on the company’s next year's annual performance, the statement said.
This transaction is one of the largest private equity deals in the Indian pharmaceutical sector, and is expected to close in 2020, subject to customary closing conditions and regulatory approvals.
JP Morgan served as financial advisor and AZB & Partners and White & Case served as legal advisors to Carlyle.
From the beginning of the year, Piramal Enterprises lost 11% against a drop of 15% in the benchmark index, Sensex. From March lows, Piramal Enterprises stock has more than doubled, while Sensex was up 36%.
For the quarter ended 31 March, Piramal Enterprises reported a consolidated loss of ₹1702 crore against a profit of ₹455.25 for the same quarter last year. Net Sales fell 2% to ₹3341 crore for the March quarter over ₹3408.52 crore for the corresponding quarter last year.
Piramal Enterprises Limited (PEL) is one of India’s large diversified companies, with presence in Financial Services and Pharmaceuticals.