Piramal Enterprises surges over 7.5% in early trade, retreats later

The deal, once completed, may value the Piramal Group's overall pharma business at $2.5 billion, the report added.

Shares of Piramal Enterprises (PEL) climbed as much as 7.68 per cent to Rs 982.55 apiece on the BSE on Tuesday amid media reports that the American private equity giants TPG Capital and KKR & Co. Inc. may acquire around 20 per cent stake in Piramal Group’s proposed pharmaceutical entity that would combine the group’s pharma businesses. 

The stock, however, pared gains later and at 09:30 am, it was trading over 3 per cent higher at Rs 941 on the BSE. In comparison, the benchmark S&P BSE Sensex was quoting nearly 4 per cent higher at 28,626.85 levels. 

Equity giants TPG Capital and KKR & Co. Inc. have emerged as the front runners to invest Rs 3,500-4,000 crore for acquiring a 20 per cent stake in Piramal Group’s proposed pharmaceutical entity that would combine the group’s pharma businesses, said a report by the business daily Mint. 

The deal, once completed, may value the Piramal Group’s overall pharma business at $2.5 billion, the report said. 

As per the plan, the pharma businesses will be demerged from PEL and combined into a new entity, 20% of which will be owned by one of the two private equity players cited above, while at least 25% will be owned by the public and the remainder will remain with the promoters, the report added. 

It must be noted that Piramal Group operates four pharma businessess, controlled by its flagship, PEL. Othe pharma companies are Piramal Pharma Solutions, Piramal Critical Care, Piramal Consumer Products, and PhytoMedicine. 

Shares of the company have fallen around 33 per cent since March 2 to April 3, BSE data shows. The S&P BSE Healthcare index, on the other hand, has slipped 7.6 per cent during the period. The frontline index, S&P BSE Sensex, has declined 27.6 per cent during the period, BSE data shows.