Piramal Enterprises Declares Buyback of Rs 1,750 crore, Fixes Record Date

NBFC major, Piramal Enterprises on July 28 announced a buyback offer of up to Rs 1,750 crore while delivering its Q1 results for FY24. The record date for the buyback is fixed on August 25. However, Piramal shares ended in red after posting a 93.76% decline YoY in consolidated net profit to Rs 508.78 crore.

As per the regulatory filing, Piramal's board approved a buyback of 1.40 crore equity shares at a price of Rs 1,250 apiece, being g 5.87% of the total paid-up equity share capital.

The overall size of the buyback is aggregated at Rs 1,750 crore.

It said, "The Buyback is proposed to be made from the shareholders of the Company as on the record date on a proportionate basis under the tender offer route in accordance with the provisions..."

Further, Piramal said that the board may one day prior to the record date of the buyback, increase or decrease the floor price, and number of equity shares proposed under the buyback.

The record date is fixed on August 25, 2023, for the purpose of determining the entitlement and names of the shareholders eligible to participate
in the Buyback.

The tendering period of the buyback will open for a period of five working days.

As of July 21, 2023, the company's promoter and promoter group holds 43.48% stake in Piramal, while domestic institutions hold 13.55%, and foreign investors hold 25.74%. The rest of the 17.23% shareholding is held by the public, corporates and others.

It needs to be noted that Piramal said, "The promoter and promoter group shall not participate in the buyback."

The entire process is expected to be completed within 2 months.

In Q1FY24, the company posted a net profit of Rs 508.78 crore, dropping by 93.76% from Rs 8155.47 crore in Q1 of the previous fiscal. The Q1 PAT was led by gains of Rs 855 crore arising from the sale of shares in Shriram Finance. Sequentially, the company's profit jumped against a net loss of Rs 195 crore in the March 2023 quarter.

However, the company's revenue stood at Rs 2,899 crore in Q1FY24 as against Rs 2,161 crore in the same quarter a year ago, rising by 34% YoY. As of June 30, 2023, total Assets Under Management (AUM) stood at Rs 63,938 crore, while Retail lending grew to 55% of AUM from 34% in Q1 FY23.

The company offloaded 8.34% stake aggregating to 3.12 crore equity shares in Shriram Finance for Rs 4,820 crore for Rs 1,545 per share.

Post the Q1 results and buyback offer, Piramal's share price ended at Rs 1072.80 apiece down by Rs 23.55 or 2.15% on BSE.

PEL is a leading diversified Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI), with a presence across retail lending, wholesale lending, and fund-based platforms. The company has investments and assets worth $10 billion, with a network of branches across 25 states/UTs. PEL has built a technology platform, which is driven by artificial intelligence (AI), with innovative financial solutions that cater to the needs of varied industry verticals.