Piramal Enterprises gains after acquiring stake in Shriram Capital

Piramal Enterprises rose 1.20% to Rs 603 at 10:32 IST on BSE after the company said it has agreed to acquire 20% stake in Shriram Capital for Rs 2014 crore.

The company made the announcement during trading hours today, 17 April 2014.

Meanwhile, the BSE Sensex was up 169.78 points, or 0.76%, to 22,447.01.

On BSE, so far 27,000 shares were traded in the counter, compared with an average volume of 12,468 shares in the past one quarter.

The stock hit a high of Rs 624.80 and a low of Rs 600 so far during the day. The stock hit a record high of Rs 648.30 on 2 September 2013. The stock hit a 52-week low of Rs 476 on 25 June 2013.

The stock had outperformed the market over the past one month till 15 April 2014, rising 13.71% compared with the Sensex's 3.10% rise. The scrip had, however, underperformed the market in past one quarter, rising 3.25% as against Sensex's 5.62% rise.

The large-cap company has an equity capital of Rs 34.51 crore. Face value per share is Rs 2.

Piramal Enterprises announced that it has agreed to acquire an effective 20% equity stake in Shriram Capital, a financial services company, for an aggregate consideration of Rs 2014 crore.

Shriram Capital (SCL) is the overarching holding company for the Financial Services and Insurance entities of the Shrlram Group, created with the primary objective of optimizing the synergies across the Group's entities. Shriram Capital's operating entities, have an overall customer base in excess of 9 million, more than 53,000 employees across 2,600 offices, net profit of Rs 800 crore with Assets Under Management (AUM) in excess of Rs 78000 crore.

Piramal had invested Rs 1636 crore in May last year to acquire ~9.9% equity in Shriram Transport Finance Company, one of the listed NBFCs forming part of the Shriram Group.

Commenting on the investment, Mr. Ajay Piramal, Chairman of Piramal Enterprises Limited, said "This investment builds our presence in financial services sector and we see long term shareholder value creation from our partnership with Shriram Capital. The Company is well known for its culture and values, which resonates well with Piramal Group's philosophy."

Commenting on the partnership, Mr. R. Thyagarajan, Founder of Shriram Group, said Shriram Group has pioneered providing financial services to the under-served section of the economy. Our success over the last four decades has been possible only through strategic partnerships. Piramals' entry into Shriram Capital is a significant milestone for the Financial Services businesses to take a quantum leap in the Group's contribution to the community at large".

On a consolidated basis, Piramal Enterprises reported a net loss of Rs 11.14 crore in Q3 December 2013 compared with net profit of Rs 61.07 crore in Q3 December 2012. Net sales rose 29.3% to Rs 1269.34 crore in Q3 December 2013 over Q3 December 2012.

Piramal Enterprises is one of the India's largest diversified companies, with a presence in pharmaceutical, financial services and information management sectors.

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