Piramal Enterprises (PEL) has received board approval to buy back shares worth Rs 1,750 crore, the first by the diversified financial services firm after the demerger of its pharmaceutical business.
The firm intends to buy the shares at Rs 1,250 apiece. It proposes to buy back 14 million shares of face value of Rs 2, which represents 5.87% of its total paid-up share capital, the company said in a regulatory update.
PEL has fixed August 25 as the record date for the proposed buyback. The buyback price is at a 16.51% premium over Friday’s closing price of Rs 1,072.80, down 2.15%, on BSE.
The process is expected to be completed within two months, he said.
As of June 30, PEL had a net worth of Rs 30,844 crore, with cash and liquid investments of Rs 9,613 crore (12% of total assets) and a gross debt of Rs 47,077 crore. Its debt-to-equity ratio stood at 1.53:1. As of July 21, PEL’s promoter and promoter group shareholding stood at 43.48%, domestic institutions at 13.55%, foreign holding at 25.74% and remaining with the public and others.
Separately, Piramal Pharma’s board approved a rights issue worth Rs 1,050 crore at a price of Rs 81 a share. The issue will open for subscription on August 8 and close on August 16. The issue size has been fixed at 129.6 million, while the record date to determine eligible shareholders for the offer-for-sale (OFS) is August 2. As of March 31, the net debt-to-equity of Piramal Pharma was at 0.71:1.
Q1 profit falls 94%
On Friday, PEL posted a consolidated net profit of Rs 509 crore, a 94% fall from Rs 8,155 crore recorded during the same quarter of last fiscal. The NBFC had posted a net loss of Rs 196 crore in the quarter ended March.
The net profit for Q1 was led by a gain of Rs 855 crore on the sale of Shriram Finance. Consolidated total income fell 9% to Rs 1,935 crore from Rs 2,121 crore from the year-ago period, it said.
“Our Q1 performance is in line with our endeavour towards building a large diversified NBFC. In the mid-to-long term, we aim to have retail lending account for two-thirds of our assets, reflecting our strategic focus,” Piramal added.