Piramal the King of (De)Mergers: Cat/Mārjāra is Out of the Bag!

Piramal the King of (De)Mergers: Cat/Mārjāra is Out of the Bag!

Posted on 9th December, 2024 (GMT 09:01 hrs)

ABSTRACT

The blog post critiques Ajay Piramal’s business strategies, labeling him a “Chameleon King” for repeatedly using mergers, demergers, and rebranding to evade accountability. It highlights his corporate history, including acquisitions in the pharma sector and controversial actions in housing finance, such as the acquisition of DHFL during its insolvency proceedings. The post accuses Piramal of exploiting legal loopholes, obscuring past misconduct, and profiting while avoiding regulatory scrutiny. Key examples include the environmental violations in Digwal, Telangana, which was followed by the demerger of Piramal Pharma, and alleged irregularities in discounted DHFL loans benefiting entities linked to Piramal. The post criticizes his reliance on legal stays to delay unfavorable rulings, branding this pattern as a tactic to sidestep responsibility. Ultimately, it calls out Piramal’s strategies as manipulative corporate maneuvers that undermine public trust and regulatory oversight, while benefiting from political connections and systemic gaps in accountability.

We are back again with a brief yet comprehensive discussion on Mr. Ajay Piramal’s peculiar business strategies to establish himself again and again as a seemingly “invincible” (paper tiger?) crony corporate tycoon in India.

The DHFL victims have observed that the psyche or persona of Mr. Piramal as reflected through the history of companies within his conglomerate reveal a striking schizophrenic fragmentation, as we discussed the same in the following:

The Psychoanalysis of a Crony Billionaire: Ajay Piramal

Posted on 05/05/2023 (GMT 11:30 hrs) Updated on 21/05/2023 (GMT 15:50 hrs) I. Introduction In continuation to our previous article, WHO IS AJAY PIRAMAL?⤡, this article shows the psychoanalytic analysis of Mr. Ajay Piramal. We have consulted many psychiatrists without mentioning Mr.. Piramal’s name but with the following instances of his deeds. In the Part … Continue readingThe Psychoanalysis of a Crony Billionaire: Ajay Piramal

Once in a Blue Moon AcademiaThe Dilemma of schizophrenic selves: the changing names of companies under the Piramal Group: A letter to Mr. Ajay Piramal

Posted on 30th May, 2022 To  Mr. Ajay Piramal Makharia CBE, The Honourable Chairman, Piramal Group, 4th Floor, Piramal Tower Annexe,  Peninsula Corporate Park,  Ganpatrao Kadam Marg, Lower Parel,  Mumbai – 400013 Sub: The Dilemma of schizophrenic selves: the changing names of companies under Piramal Group Dear Mr. Ajay Piramal, We, the common people, do not understand the different branches of … Continue readingThe Dilemma of schizophrenic selves: the changing names of companies under the Piramal Group: A letter to Mr. Ajay Piramal

Once in a Blue Moon AcademiaThis “dilemma” of Mr. Piramal is not only observed in the case of the DHFL scam, but also in the case of his other businesses through several consecutive mergers and demergers as well as namings and renamings.

For example,

1. His pharma-business has shown such a chain of events:

• Early 1980s: Mr. Piramal took over the reins of the Piramal Group, acquiring Gujarat Glass Limited in 1984 (later renamed as Piramal Glass).
• 1988: Acquired Nicholas Laboratories, entering the pharma sector.
• 1992: Renamed as Nicholas Piramal India Ltd. (NPIL)
• 1993: Collaborated with Allergan; acquired Roche India’s domestic business.
• 1999: Piramal Glass acquired Ceylon Glass Company Limited, Sri Lanka.
• 2000-2016: Multiple acquisitions, including ICI Pharma, Coldstream Labs, and Ash Stevens. In 2006, the company bought Pfizer’s UK manufacturing facility in Morpeth. The company also formed the Piramal Foundation, a CSR/philanthropic arm of the group. In 2008, NPIL became merged with Piramal Healthcare Limited (PHL).  In 2011–12, Piramal bought 11% in Vodafone Essar. PHL went on to become a part of PEL in 2012. Piramal’s Decision Resources Group acquired Abacus International, a UK based company. In 2013, Piramal Enterprises acquired the brand Caladryl in India.  In 2014, it sold its 11% Stake in Vodafone India to Prime Metals, an indirect subsidiary of Vodafone Group.
• 2020: After becoming a Piramal Enterprises subsidiary, it received Carlyle investment. In December 2020, Piramal Glass was sold to The Blackstone Group for US$1 billion.
• 2022: Demerged and listed as Piramal Pharma Limited (PPL), just a few years after it was accused by the National Green Tribunal for flouting environmental norms in Digwal, Telangana.
• 2023: Expanded manufacturing facilities in Canada, the U.S., and Scotland.

2. His Housing-Finance Business, especially in the context of its unfolding during the DHFL scam (2019—), has shown such similar merger-demergers:

Piramal Enterprises, the flagship of the Piramal Group, focuses on financial services, specializing in retail lending, housing, and vehicle finance. Its key subsidiaries include Piramal Capital & Housing Finance (PCHFL) and PHL Fininvest. In 2021, it integrated Dewan Housing Finance Corporation Limited (DHFL) into PCHFL, following its alleged “acquisition” (or adverse possession?!). The company collaborates with fintech and vehicle finance firms. Its strategic ventures include the India Resurgence Fund (with Bain Capital since 2016) and Piramal Capital Fund (with CDPQ since 2020), managed by the fund management business: Piramal Alternatives (founded in 2021).

In May 2024, Piramal Enterprises announced plans to merge with its unlisted housing finance arm, Piramal Capital & Housing Finance (PCHFL), to streamline its structure. Shareholders will receive equity in the merged entity, renamed Piramal Finance, and redeemable preference shares. This aligns with RBI’s 2025 listing mandate for upper-layer NBFCs and licensing requirements. The merger, expected in 9–12 months, aims to enhance operational flexibility and stakeholder value.

Piramal Enterprises to merge with unlisted housing finance arm for listing VIEW HERE ⤡ (As reported on 9th May, 2024 ©Business Standard)

After Aditya Birla, Piramal to merge with private arm VIEW HERE ⤡ (As reported on 9th May, 2024 ©Mint)     

On 4th April, 2024, it was seen that:

Sebi pulls up Piramal Enterprises with regard to sale of its 8.34 per cent stake in Shriram Finance VIEW HERE ⤡ (As reported on 5th April, 2024 ©The Telegraph)

(Shriram Finance now provides one of the highest fixed deposit interest rates, offering up to 9.40% annually. This includes additional benefits of 0.50% p.a. for senior citizens and 0.10% p.a. for women depositors, ensuring attractive returns on investments⤡. We anticipate another “DHFL scenario” in Shriram Finance’s upcoming future. Hence, Beware of Shriram Finance!)

Moreover, in November 2024, SEBI is also proposedly investigating Whistleblower claims against Piramal Capital & Housing Finance Ltd (PCHFL) regarding discounted loans transferred from DHFL to entities linked to Piramal Group promoters. Allegedly, these transactions caused financial harm to public shareholders of Piramal Enterprises Limited (PEL). Loans were reportedly assigned at deep discounts to entities like Encore Natural Polymers, yielding profits for the recipients. The Whistleblower also questions fund origins tied to defaulter Sudhakar Shetty. This follows a broader CBI inquiry into DHFL’s financial mismanagement involving Rs 14,000 crore. No official responses have been issued till now.

Whistleblower Seeks Sebi Probe Into Piramal Entity Selling DHFL Loan At Steep Discount VIEW HERE ⤡ (As reported on 14th November, 2024 ©Business World)

SEBI launches enquiry into alleged irregularities in Piramal’s acquisition of DHFL loans, says report VIEW HERE ⤡ (As reported on 15th November, 2024 ©DNA India)

For more information, view the following:

 41Comments 

 30Comments