Piramal Enterprises to Merge with Subsidiary Piramal Finance, Simplifying Group Structure

The board of directors of Piramal Enterprises has approved the merger with its wholly owned subsidiary, Piramal Capital & Housing Finance (PCHFL), which will be renamed Piramal Finance following the merger.

As part of the merger consideration, shareholders of Piramal Enterprises will receive one equity share of Piramal Finance (PFL) and, subject to RBI approval, one NCRPS (non-convertible non-cumulative nonparticipating redeemable preference share) of Rs 67 of PFL for each share held in Piramal Enterprises. The entire process is expected to take 9-12 months to complete.

The primary objective of this consolidation is to simplify the group structure, providing shareholders with direct access to the entire lending business, according to the company.

In a stock exchange filing, Piramal Enterprises highlighted that the merger plan requires approval from banking and market regulators, shareholders, creditors, the National Company Law Tribunal, and stock exchanges. 

“Piramal Capital is an upper-layer NBFC mandated to list by September 2025. Pursuing this merger will allow the resultant listed entity to meet that requirement and eliminate operational inefficiencies associated with having two lending entities,” the company stated in the exchange filing. 

The company also noted that PCHFL, with its current diversified lending profile, has applied to the RBI for conversion of its Housing Finance License to an NBFC-ICC license. An NBFC-ICC, defined by the RBI, is a company whose principal business involves asset finance, providing loans, and acquiring securities. 

The proposed merger is aimed at streamlining governance and operational efficiency, aligning with the company’s multi-product retail business model.