Piramal Enterprises inches up after acquiring 10% stake in Shriram City Union Finance

Piramal Enterprises rose 0.81% to Rs 707.50 at 13:09 IST on BSE after the company said it has acquired 9.99% equity stake in Shriram City Union Finance.

The announcement was made during market hours today, 5 June 2014.

Meanwhile, the S&P BSE Sensex was up 61.74 points or 0.25% at 24,867.57.

On BSE, so far 6,955 shares were traded in the counter as against average daily volume of 20,021 shares in the past one quarter.

The stock was volatile. The stock rose as much as 1.16% at the day's high of Rs 710 so far during the day. The stock lost as much as 0.96% at the day's low of Rs 695 so far during the day. The stock had hit a record high of Rs 717 on 2 June 2014. The stock had hit a 52-week low of Rs 476 on 25 June 2013.

The stock had outperformed the market over the past one month till 4 June 2014, surging 28.58% compared with the Sensex's 10.72% rise. The scrip had also outperformed the market in past one quarter, galloping 32.02% as against Sensex's 16.95% rise.

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

Piramal Enterprises said that it has acquired 65.79 lakh equity shares of Shriram City Union Finance, the retail focused non-banking financial company (NBFC) of the Shriram Group. The acquisition, by way of a preferential allotment of shares by Shriram City Union, was at a price of Rs 1,200 per equity share. The total consideration paid was Rs 790 crore, Piramal Enterprises said in a statement.

In April this year, Piramal had acquired an effective 20% equity stake in Shriram Capital, the overarching holding company for the financial services and insurance entities of the Shriram Group, for a consideration of Rs 2014 crore. Piramal had also invested Rs 1636 crore in May 2013 to acquire approximately 9.9% equity in Shriram Transport Finance Company, one of the listed NBFCs forming part of the Shriram Group.

Commenting on the partnership, Ajay Piramal, Chairman of Piramal Enterprises said, "We are happy that the shareholders of Shriram City Union Finance have approved our investment in the company. This capital infusion will support its present business model and help further its growth plans over the next few years. Shriram has a good team and we are confident it will create long term value for shareholders of both companies. Shriram is well positioned to take advantage of the India story, and we see great potential for growth."

Piramal Enterprises reported a consolidated net loss of Rs 311.35 crore in Q4 March 2014, higher than net loss of Rs 200.41 crore in Q4 March 2013. Net sales rose 19.8% to Rs 1110.38 crore in Q4 March 2014 over Q4 March 2013.

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

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