Piramal Enterprises gains after Vodafone gets nod to fully own India arm

Piramal Enterprises rose 1.26% to Rs 554 at 11:20 IST on BSE on reports British telecom company Vodafone won cabinet's approval to buy 11% stake in Vodafone India from Piramal Enterprises.

Meanwhile, the BSE Sensex was up 82.93 points, or 0.41%, to 20,393.67.

On BSE, so far 4,359 shares were traded in the counter, compared with an average volume of 14,427 shares in the past one quarter.

The stock hit a high of Rs 564 and a low of Rs 552 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 6 February 2014, falling 1.43% compared with the Sensex's 2.29% fall. The scrip had outperformed the market in past one quarter, falling 2.70% as against Sensex's 2.80% decline.

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

According to reports, the Cabinet Committee on Economic Affairs approved on Thursday, 6 February 2014, the application of British telecom company Vodafone to raise stake in its Indian arm to 100%, for Rs 10141 crore, from 64.38% at present.

In the process, Vodafone Plc, the parent, will buy out the minority shareholders, who together own 35.62% of the equity in Vodafone India. The company had approval from the Foreign Investment Promotion Board (FIPB) in December last year.

Piramal Enterprises, which owns 10.97% direct equity holding in Vodafone India, will get Rs 8900 crore, a premium of about 51% for its stake. The remaining Rs 1241 crore will go to Analjit Singh, founder-head of Max India, who indirectly holds the remaining stake, media reports added.

Piramal Enterprises had invested a total of Rs 5900 crore to buy the 10.97% in Vodafone India, in two tranches. While Piramal Enterprises had invested an average Rs 537.83 a share for its stake, the selling price is Rs 811.30 a share. Piramal had first bought 5.47% stake for Rs 2893 crore in 2011. In February 2012, it bought another 5.5%, for Rs 3007 crore. Vodafone India's valuation rose 48% since February 2012, when Piramal took 5.5% for Rs 3007 crore, reports suggested.

As per reports, Vodafone India is now valued at Rs 81130 crore, about 42% higher than the Rs 57000 crore Vodafone Plc had paid Hutchison in 2007 to buy 67% stake in the company.

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

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

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