Mumbai-based company Piramal Enterprises Ltd (PEL) has approved a share buyback program worth Rs 1,750 crore ($235 million). This will be the first-ever share buyback by the company, with PEL repurchasing up to 1.4 crore shares, equivalent to 5.87% of its pre-buyback fully paid-up shares. The buyback will be conducted at a price of Rs 1,250 per share through the tender offer route. The offer price represents a premium of 16.51% to the closing price of PEL shares on the Bombay Stock Exchange (BSE) on Friday.
Notably, the promoters of PEL, who hold approximately 43.48% of the company’s equity, will not participate in the buyback program. The move aims to enhance shareholder value and boost investor confidence.
Simultaneously, Piramal Enterprises announced its financial results for the quarter ending June 30. The company reported a significant decline in consolidated net profits, attributed to an exceptional gain of Rs 7,614 crore ($1.02 billion) from the demerger of its pharmaceutical business last year.
Comparing the results with the same period of the previous fiscal year, net profit plummeted from Rs 8,155 crore ($1.09 billion) to Rs 509 crore ($68 million). This decline was largely due to interest income falling 15% to Rs 1,725 crore ($231 million) during the quarter, compared to Rs 2,039 crore ($273 million) in the year-ago period.
Ajay Piramal, Chairman of Piramal Enterprises, commented on the company’s performance, stating that the first-quarter results were in line with their strategic focus of building a large and diversified non-banking financial company. The company aims to have retail lending account for two-thirds of its assets in the medium to long term.
The share buyback program and the decline in profits reflect the company’s efforts to strengthen its financial position and optimize shareholder value. Despite the challenging economic conditions, Piramal Enterprises remains focused on its long-term goals and strategies to create a more robust and diversified business.
