Piramal Enterprises Ltd is demerging its pharmaceutical business into a separately listed company.

The process will see the pharma business being consolidated under Piramal Pharma Ltd which at present is a subsidiary of Piramal Enterprises.

The shareholders of Piramal Enterprises will get four shares of Piramal Pharma for every share held by them.

As part of the plan, two operating subsidiaries of Piramal Enterprise will be amalgamated with Piramal Pharma.

Following the demerger, Piramal Enterprises will be a non-banking finance company (NBFC) offering solutions across both the retail and wholesale segments.

The Piramal group had recently completed the acquisition of DHFL, with subsidiary Piramal Capital & Housing Finance Ltd being merged with DHFL. Piramal Enterprises will continue to own a 100 per cent stake in this housing finance company.

The decision to segregate Piramal Enterprises’ pharmaceutical business was taken by its board of directors on Thursday.

Piramal Enterprises said the move will simplify its corporate structure with two separate entities in different fields and unlock value for its shareholders.

It will strengthen the governance architecture for the businesses with separate dedicated boards and management teams.

The company expects the demerger will create an optimal capital structure for each business and enable their respective managements to independently pursue their plans .

Piramal Enterprises after the demerger will become a financial services company with a consolidated loan book of Rs 65,000 crore.

PHL Fininvest Pvt Ltd, the non-banking financial company of the group will be amalgamated with Piramal Enterprises.

After the demerger, the promoters will hold 44 per cent in Piramal Enterprises with the rest held by the public. In Piramal Pharma, the promoters will hold 35 per cent and the public will hold 45 per cent.

The rest will be with the Carlyle group, which had picked up a 20 per cent stake in Piramal Pharma a year ago for over Rs 3,500 crore.

Shares of Piramal Enterprise ended with gains of almost two per cent on the news. At the BSE, the share ended at Rs 2,886.40 — a rise of 1.57 per cent over its last close.

Piramal Enterprises posted consolidated revenues of around Rs 12,809 crore in 2020-21. The financial services business contributed 55 per cent with the remaining 45 per cent coming from pharma.