If it is true…why now?
Odds of Piramal winning DHFL bid is high !
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See the TOI news which clearly says that Piramal is planning to acquire DHFL as a going concern and retain employees and customers. So it is not a simple portfolio deal
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Another price hike by Piramal by 1700 cr. On the way to “Winner Curse?”
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The suspense continues… and I guess it will not end even after they declare the winner by 15th Jan as Oaktree has hinted at taking legal recourse if they get sidelined. I am sure lot of behind the door tussle will be going on where Piramal would have obvious upper hand being local company but Oaktree would not be far behind as they will use their US connections in the Delhi corridors being a FII/FPI. Interesting to watch which way it goes…
This is indeed going to be interesting. Looks like the market is already anticipating Piramal winning the bidding process.
Also, I think Piramal would have already started the process of lining up investors to take over their stake in Shriram.
Dont know if its a fair bidding process or not? wondering
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Its almost certain that whoever may be the winner, the loser would be going to the court… so I expect the saga to continue for at least another 6 months, if not more… 
In the meantime, market is completely ignoring underlying improvement in PEL’s core business of real estate financing as well as pharma. In last one month, housing sales have improved a lot, real estate company stocks have moved quite a bit and housing finance companies are also near pre covid levels. But in case of PEL, market is fixated on DHFL resolution and not ready to value PEL’s current business appropriately. I hope that may happen in 2021 once quarterly results show all round improvement.
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It looks like the Real estate sector is coming out of woods.
Historically, “Real estate” sector causes real Wealth effects for the country. Ever-since Govt brought new regulations for the industry, not only the real estate sector is down, but the overall economy has suffered. Until the govt comes back with policies and actions that cause the Real estate sector back on track,7-8% growth will be a pipe dream.
Currently, different state govt has come up with buyer incentive and is showing momentum in the real estate sector. Today Maharashtra govt has reduced various taxes in order to boost construction sections.
I have heard that there was a queue of 4/5 hours to complete the buy tractions (in one of the ET now video).
DLF Management (last week on ET Now) has expressed similar optimism. Their super-premium segments (flats about 3.5 crore) were sold in record time and encouraged by the success they are planning to launch similar project/offer in next 6 months.
As more and more positive reports come in, these people who are in side-line will have to act; otherwise, they would face the fear of missing out.
Pharma- In one of the interviews (CNBC ), Mr Piramal said that the valuation PEL quoted for the pharma division post Covid was same as pre Covid- which is 15 times EBITA. If I see the change in valuation of pharma companies from May/June till Dec end, most of them have appreciated by (50-100) %. It looks like the market is ignoring pharma side from PEL’s valuation. On the back of envelope calculation, assuming 6000 cr sales, 1500 EBITA (same as last year) PAT shall be around 1000. So good part of PEL’s current market valuation (31k cr) is captured by pharma division in my view.
However, the next few months PEL price may revolve around DHFL, and the stock price is likely to vacillate based on DHFL announcements. I just hope that DHFL does not end up in bidding war.
Note- I am holding PEL so views are biased.
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Fully agree - this is still remarkably undervalued looking at pharma valuation and the real estate upcycle.
Low risk and potential for high return.
Disc: top holding in my tactical portfolio.
There has been a spate of good news from Lodha recently, which is positive for PEL too.
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Top quality analysis from Motilal Oswal about PEL’s pharma business.
Piramal-Enterprises-12-01-2021-moti.pdf (798.7 KB)
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The greatest feature of this deal is that PEL has not even considered the Rs 33309 Crores of ‘assets’ that have been allegedly fraudulently diverted while bidding for DHFL.
But as per the resolution plan the Buyer will get any proceeds that may be recovered.
Of course this will be subject to litigation.
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