Piramal Enterprises Share price and Fundamental Analysis

Company History

Piramal Enterprises Limited (PEL), erstwhile Piramal Healthcare Limited, is the flagship company of the Piramal Group, led by Ajay Piramal. Established in the 1980's, the Group is one of India's powerhouse conglomerates with a track record of establishing successful businesses in varied industries. With a history of successful organic and inorganic growth ventures, the Piramal Group today has a global presence across 30 countries.

The Company is a growing, diversified Non-Banking Financial Company (NBFC) with presence in Retail and Wholesale Lending, Alternative funds and Life Insurance businesses. The Company has completed the integration of Dewan Housing Finance Ltd. (DHFL) and is now one of the largest housing finance companies in India.

In Pharma, through an end-to-end manufacturing capabilities across 13 global facilities and a large global distribution network to over 100 countries, PEL sells a portfolio of niche differentiated Pharma products and provides an entire pool of Pharma services (including in the areas of injectable, HPAPI etc.). PEL's Global Pharma business has a strong product portfolio of niche differentiated branded generic products that are difficult to manufacture, sell or distribute. PEL's Contract Development and Manufacturing Organisation (CDMO) services segment offers end-to-end solutions across the drug life cycle through a globally integrated network of facilities. PEL's India consumer products division caters to the Indian self-care market. PEL's OTC range comprises of 18 major brands from the pharmaceutical and personal care space, in diverse product categories like Vitamins & Nutrition, Dermatological & Antacids, Analgesics and Baby Care.PEL's Healthcare Insights & Analytics business is the premier provider of healthcare analytics, data & insight products and services to the world's leading pharma, biotech and medical technology companies and enables them to take informed business decisions.

In Financial Services, PEL provides wholesale lending, housing finance and is also into Alternative Asset Management. PEL's wholly owned subsidiary Piramal Capital & Housing Finance Ltd is registered as a housing finance company with National Housing Bank (NHB) and engaged in various financial services businesses. It provides both wholesale and retail funding opportunities across sectors.

Piramal Enterprises was incorporated as Indian Schering Limited on 26th April, 1947 under British Schering Ltd. It operates in the therapeutic segments of anti-bacterials, cardiovasculars, anti-diabetics, nutritional, central nervous system and gastro-intestinal. In addition, it has a presence in the OTC segment through various joint ventures and alliances. The Company's manufacturing activities are well supported by active research and development, the R&D facility called the Quest Institute of Life Sciences in Mumbai that focuses on process development.

The name of the company was changed from Indian Schering Ltd to Nicholas Laboratories India Ltd with effect from 27th September of the year 1979. The Pharmaceutical division of the company introduced a medicine called Mono Sorbitrate' in the year 1988 for cardiac patients. With effect from 1st April of the year 1990, Gujarat Glass Ltd (GGL) was merged with the company. During the year 1991, the new formulation plant at Pithampur in Madhya Pradesh was commissioned. After a year, in 1992, the company had set-up a second formulation plant at Pithampur in Madhya Pradesh with the State-of-the-art manufacturing facilities. With effect from 2nd December of the year 1992, the name of the company was changed from Nicholas Laboratories Ltd' to Nicholas Piramal India Ltd.' PHL entered into a joint venture (JV) agreement with the leading manufacturers of ophthalmic products 'Allergan' of U.S.A in the year 1993 and also the company made a JV agreement with Sateliec, France in the year 1994 for dental care products. During the year 1995, PHL had entered into a scheme of arrangement with Sumitra Pharmaceutical and Chemicals Ltd (SPCL) Hyderabad. Under the scheme bulk drug division of SPCL transferred and vested in the company effective from April of the same year. The Company entered into a product tie-up with F.Hoffman-La-Roche and Boehringer Mannheim in the year 1996, both leads in Pharma research. The Flaconnage (Glass) Division of the company was successfully commissioned 5MW captive power plant at Kosamba in the same year 1996 to insulate the division from the vagaries of power availability and tariff increases.

With effect from 1st April of the identical year of 1996, Boehringer Mannheim India Ltd. (BMIL) was merged with company. During the year 1997, PHL's state-of-the-art 230 TPD plant for manufacture of sodaline containers at Jambusar near Baroda was commissioned with an investment of Rs 125 crores and also in the same year the company made various agreements regarding marketing and in different disciplines. A joint venture was made with Allergan, US, for eye care products, Scholl, UK, for foot-care products, and with Cytran, US, for immunological products. The company took over Jenkins Botswana, a formulation company based in South Africa. In 1998, a memorandum of understanding (MoU) was signed with a major European chemicals company to start manufacturing speciality chemicals with equity partnership. During the same year of 1998, PHL had acquired the basic research unit of Hoechst Marion Roussel (India) at Mulund on the outskirts of Mumbai for about Rs.20 crore. During the year 1999, the company had launched nine products including Recormon, Accutrend, Amexyl, Orthrobid Gel and Carvetrend and also PHL had identified an anti-cancer molecule at its research centre. It became the first Indian pharmaceutical company to join the Industrial Liaison Programme (ILP) of Massachusetts Institute of Technology (MIT), USA.

The Company made tie-up with the Centre for Biochemical Technology (CBT) in the year 2000 for conducting basic research in genomics and in the same year PHL acquired a 40 per cent stake in Rhone-Poulenc India Ltd, which made it the second largest pharmaceutical group in India. It also entered into a research alliance with Hindustan Lever for developing Cosmoceuticals and personal care products. The Industrial Paints Division of the company would be hived off into a separate joint venture company with an international player. PHL had pulled out of its 50:50 joint venture with the UK-based Scholl Plc (now known as Seton-Scholl Healthcare Plc) in the year 2001. The group closed the acquisition of a 27.72 per cent equity stake in German Remedies Ltd. The Company had entered into a strategic alliance with MD India Healthcare Services Pvt Ltd. In the year 2002, ICI India transferred its pharmaceuticals business to the company. PHL had launched a new generation anti-allergic called 'Airitis' to combat allergic rhinitis in the country during the period of 2003. In the same year, the company dropped the Frame Co operation Agreement with F Hoffman La Roche and contradictorily signed agreement with Advanced Medical Optics for supply of products.

During the year 2004, PHL had entered into research collaboration with the Bangalore-based Indian Institute of Science (IISc) to identify potential new targets for developing drugs to treat fungal infections and sealed an In-Licensing Agreement with Genzyme Corporation for Indian Market. Also in the same year of 2004, the company joined hands with NII for research on inflammation drugs. In the year 2005, the company had acquired Avecia Pharmaceuticals, UK. BioSyntech signed scientific collaboration agreement with the company in November of the year 2006 and also in the same year PHL had signed an agreement to acquire Pfizer's Morpeth, UK Facility with potential outsourcing revenues exceeding US. The Plant Screening Agreement was ensued between the company and Pharmaceuticals, Inc in January of the year 2007 to discover novel diabetes therapeutic agents. PHL had spun off its new chemical entity and herbal drug research division into a stand-alone company in the same year 2007.

As at January 2008, PHL had signed MoU on research in oncology with Pierre Fabre Laboratories. This agreement formalises the collaboration between the two pharmaceutical laboratories specialising in research on natural substances. PHL had inked a pact for purchase of Anafortan and CEFI Brand Groups of Khandelwal Laboratories (K-Lab) for a total consideration of Rs 1,160 million in April of the year 2008. The Company completed a definitive agreement with Plasma, Germany in July of the year 2008 to acquire PlasmaSelects polygeline based blood plasma products marketed under the brand name Haemaccel' in over 38 countries with the cash consideration of Euro 7.7 million for the transaction. In July 2008, the company jointly with Pierre Fabre launched a new dermo-cosmetic range, Ducray'.

In 2008, Nicholas Piramal India Limited was renamed to Piramal Healthcare Limited. In 2009, Piramal Healthcare (PHL) acquired RxEliteinc, the U.S. based inhalation anesthetic gas distribution business. During the year, PHL also acquired Minard International Inc., an interventional pain management company with real-time image guidance, anesthesia and analgesia, conscious sedation product lines. Minrad manufactures and markets generic inhalation anesthetics for use in connection with human and veterinary surgical procedures.

In 2010, PHL acquired iPill, an oral contraceptive brand from Cipla. During the year, PHL sold its diagnostics division to Super Religare Laboratories Ltd. During the year, PHL acquired Biosyntech, Inc., Canada. This is a part of the Life Sciences vertical, Bio-Orthopedics division.

On 22 April 2010, Piramal Healthcare and Bharat Serums And Vaccines Limited (BSV), an Indian bio-pharmaceutical company, jointly announced that they have signed a definitive agreement for Piramal to acquire BSV's injectible anesthetic products business including - Propofol, Bupivacaine and Atracurium Besylate. This anesthetic product range is developed and manufactured by BSV at its own plant. The acquisition gives Piramal access to key intellectual property developed by BSV for the manufacture of injectible anesthetics products including process-based intellectual property and business contracts. The acquisition provides Piramal an immediate entry into the Propofol market, the largest selling injectible anesthetic globally.

In 2011, Fortune 500 ranked Piramal Healthcare in the top-50 largest corporations across India. During the year, Piramal Healthcare acquired Indiareit, a real estate focused investment trust with AUM of USD 760 Million. During the year, Piramal Healthcare acquired 11% of Vodafone India. During the year, PHL acquired Oxygen Bio-research. This is a part of the Pharmaceutical Solutions division. UN Conference on Trade and Development's World Investment Report 2011 ranked Piramal Healthcare as No. 5 in the top 10 pharmaceutical contract manufacturers worldwide.

In 2012, Piramal Healthcare Limited was renamed to Piramal Enterprises Limited. During the year, Piramal Enterprises started a Non-Banking Financial Company (NBFC) focused on lending to real estate, education and hospitals.

On 16 May 2012, Piramal Healthcare announced that it has agreed to acquire Decision Resources Group (DRG), a US based company in the healthcare information segment, from Providence Equity Partners for a consideration of approximately USD 635 million (Rs 3400 crore). Decision Resources Group provides high-quality, web-enabled research, predictive analytics via proprietary databases and consulting services to the global healthcare industry. DRG projects revenues of USD 160 million for 2012. Following the completion of the DRG acquisition, Piramal will operate Decision Resources Group as a stand-alone business.

On 4 December 2012, Decision Resources Group announced that it acquired Abacus International, a UK based global market access solutions company for many of the world's leading healthcare companies.

In 2013, Piramal Enterprises' consumer products division acquired the brand CALADRYL in India. During the year, Piramal Enterprises Limited acquired Molecular Imaging Development portfolio of Bayer Pharma.

In 2014, Decision Resources Group acquired Relay Technology Management. The acquisition adds new products and significant technological capabilities.

During the year, Piramal Enterprises Limited agreed to acquire an effective 20% equity stake in Shriram Capital Limited, a financial services company, for an aggregate consideration of Rs 2014 crore. Piramal Enterprises Limited also acquired 9.99% equity stake in Shriram City Union Finance Limited. During the year, APG Asset Management, the Dutch pension fund asset manager, and Piramal Enterprises Limited announced a strategic alliance for investing in rupee denominated mezzanine instruments issued by infrastructure companies in India with a target investment of USD 1 billion over 3 years.

In 2015, Piramal Enterprises acquired five brands from Organon India Pvt. Ltd. (OIPL) and MSD BV for its Consumer Products Business. During the year, Piramal Enterprises acquired the Baby Care Brand - Little's for the Consumer Products Business. During the year, Piramal Enterprises Ltd. acquired Kentucky based Specialty Pharmaceutical Contract Development and Manufacturing Organisation Coldstream Laboratories Inc. During the year, Decision Resources Group (DRG) acquired Healthcare Business Insights (HBI), a trusted provider of best Practice research, training and services to more than 1,400 hospitals across the US.

In 2016, Piramal Enterprises entered into an agreement to acquire Ash Stevens Inc., a US based Contract and Drug Manufacturing Orgnisation (CDMO) for High Potency APIs (HPAPIs). During the year, Piramal Enterprises entered into an agreement to acquire four brands from Pfizer Limited for its Consumer Products Business. During the year, Piramal Enterprises announced the sale of its Canada-based cartilage repair product, BST-CarGel to Smith & Nephew.

On 23 August 2016, Piramal Enterprises Limited and Bain Capital Credit signed a Memorandum of Understanding (MOU) to create a strategic partnership to invest in restructuring situations in India. The sponsors believe that there is over an USD 1 billion investing opportunity in this space over the next few years.

On 10 October 2016, Piramal Enterprises announced that its wholly owned Critical Care subsidiary in the UK has entered into an agreement to acquire five anesthesia and pain management injectable products from Janssen Pharmaceutica NV, in an all cash deal for an upfront consideration of US$155 million, and up to an additional US$20 million. The products to be acquired are five injectable versions of well-established Janssen brands, Sublimaze (fentanyl citrate), Sufenta (sufentanil citrate), Rapifen (alfentanil hydrochloride), Dipidolor (piritramide), and Hypnomidate (etomidate).

In 2017, Piramal Enterprises completed the Acquisition of a portfolio of drugs for Spasticity and Pain Management from Mallinckrodt LLC. During the year, Piramal Enterprises Limited and Ivanho Cambridge announced partnership to invest in residential developments in India. Also during the year, Piramal Enterprises Limited announced its plan to enter housing finance.

On 30 November 2017, Piramal Enterprises' Consumer Products Division announced the acquisition of Digeplex and associated brands from Shreya Lifesciences. This acquisition strengthens Piramal's position in the Gastro-Intestinal (GI) segment and is complementary to its existing brands - Polycrol and Naturolax, in the GI segment. These brands hold rich legacy amongst consumers across India.

On 25 June 2018, Piramal Holdings (Suisse) SA, a wholly owned subsidiary of Piramal Enterprises Limited (PEL), entered into a definitive agreement thereby divesting its entire stake in Piramal Imaging SA (PISA), its subsidiary, to Alliance Medical Acquisitionco Limited (Alliance). Consequent to the divestment, Piramal Imaging Limited and Piramal Imaging GmbH, wholly-owned subsidiaries of PISA will also become subsidiaries of Alliance and cease to be step-down subsidiaries of PEL.

During the FY2019,the company issued and allotted 41,62,000 equity shares of the face value of Rs 2 each pursuant to conversion of 1,04,050 Compulsorily Convertible Debentures(CCDs).

In May 2018, the Board of Directors of the Company had approved the draft Scheme of Amalgamation between n Piramal Phytocare Ltd(PPL)-Transferor Company and Piramal Enterprises Ltd(PEL)-Transferee Company and their respective shareholders (the Scheme'). Upon the Scheme being approved by the National Company Law Tribunal (NCLT'), PEL will issue and allot 1 (one) fully paid up equity share of face value of Rs 2 each for every 70 (seventy) fully paid up equity shares having face value of Rs 10 each held by the equity shareholders of PPL, as on the Record Date which will be determind for this purpose.

During the FY2020, the company allotted 2,13,458 equity shares of the face value of Rs 2 each at an issue price of Rs 2,380 per share (including premium of Rs 2,378 per share) out of the Rights equity shares reserved for Compulsorily Convertible Debentures(CCDs).Also issued and allotted 1,41,86,200 equity shares of the face value of Rs 2 each pursuant to conversion of 3,54,655 CCDs.Further the company issued and allotted 3,05,865 equity shares of the face value of Rs 2 each pursuant to the Scheme of Amalgamation of Piramal Phytocare Limited with the company.

Also the company offered rights issue and 2,63,85,861 equity shares were allotted on 29 January 2020 at the price of Rs 1300 per share including a premium of Rs 1298 per share and 15,35,944 equity shares have been reserved for CCD Holders.

In June 2019, the Company had divested its entire equity stake of 9.96% (comprising 2,26,00,000 equity shares) in Shriram Transport Finance Company Limited.

The Hon'ble National Company Law Tribunal, Mumbai Bench, vide it's order dated 04 November 2019 had approved the Scheme of Amalgamation of Piramal Phytocare Limited (Piramal Phytocare') with Piramal Enterprises Limited and their respective shareholders (the Scheme'). The appointed date of the Scheme was April 1, 2018, which became effective from 02 December 2019.

In January 2020, the Board of Directors of the Company had divested entire stake in the Healthcare Insights and Analytics business to Clarivate Analytics PLC and its affiliates. In June, 2020, the Board approved integration of PEL's pharma businesses into its wholly-owned subsidiary Piramal Pharma Limited.

Further, the Company has entered into definitive agreements with CA Clover Intermediate II Investments, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of The Carlyle Group Inc. whereby Carlyle invested fresh equity capital towards 20% stake in Piramal Pharma in June 2020.

In October 2020, PPL and Navin Fluorine International Limited announced a mutual agreement to increase PPL's stake in Convergence Chemicals Private Limited CCPL to 100% by buying out NFIL's 49% stake in CCPL at Rs 65.10 Crore. The acquisition was completed in February 2021.

In March 2021, PPL acquired 100% stake in Hemmo Pharmaceuticals Private Limited. It launched over 15 new products and more than 35 SKUs, which include multiple COVID care products such as Tri-activ, Sanitizer Spray, Liquid Disinfectant and Oximeters.

In FY 2022, the Company commenced commercial operations at its new blocks created to expand API capacities at Aurora. It launched a new production block for Oral Solid Dosage formulations in May 2022 at Pithampur. It expanded drug substances, including HPAPIs in Riverview facility. It expanded Antibody Drug Conjugates and for upgrading its API facilities at Grangemouth and Morpeth. It acquired minority stake in Yapan Bio, an India-Based CDMO providing expertise in Biologics and Vaccines. It expanded capacities at major sites through brownfield expansions and committed $ 157 Million growth-oriented Capex investments across multiple sites. It has executed multiple contract extensions with major GPOs in the US and achieved strong Inhaled Anaesthesia sales. During the year FY 2022, the Company launched 40 new products, such as brand extension products, Home Covid Detection Kit, and a new brand CIR (Care is Rare) in Geriatric Care category, along with 18 new SKUs.

In FY 2022-23, the Composite Scheme of Arrangement between the Company, Piramal Pharma Limited (PPL), Convergence Chemicals Private Limited (CCPL), Hemmo Pharmaceuticals Private Limited (HPPL), PHL Fininvest Private Limited (PFPL) and their respective shareholders and creditors for demerger of Pharma Business from PEL to PPL, the amalgamation of CCPL and HPPL (both being wholly owned subsidiaries of PPL) into PPL; and the amalgamation of PFPL (a wholly owned subsidiary of PEL) into PEL (the Company) became operative from Appointed date i.e. 1 April 2022 and the Scheme was made effective from August 18, 2022. Consequently, the demerged undertaking i.e. the Pharma Business stood transferred to PPL and PFPL got merged with Company thereby resulting into segregation of the financial services and pharmacueticals businesses. According to the Scheme, the shareholders of the Company were allotted 4 equity shares of Rs 10 each of PPL for every 1 equity share of Rs 2 each of the Company, as on the record date of September 1, 2022. i.e. the merger ratio of 4:1.

In FY 2022-23, the Company divested its entire stake in Piramal Holdings (Suisse) SA (PHSA'), a non-operative, non-material wholly owned subsidiary of the Company to Heather Investment in Commercial Enterprises & Management Co. LLC, UAE for a consideration of USD 200,436 and consequent to the divestment, PHSA ceased to be wholly owned subsidiary of the Company in Dec' 22. Piramal Capital & Housing Finance Limited (PCHFL'), a wholly owned subsidiary of the Company acquired 100% stake in PRL Agastya Private Limited, promoter group company for a consideration of Rs 90 Crores, and, PRL Agastya became a wholly owned subsidiary of PCHFL.