Piramal Pharma Limited

Stock Opportunities
69

Hi All,

While applying for RE of PPL keep one very important aspect in mind - One can apply for more than rights entitlement.

Eg. If one has got 10 share, most of us would pay for 1 RE entitlement. However, one can make payment for 100 or even 1000 shares. Most of people don’t apply for Rights and a result promoters tend to corner lot of shares at lower price.

It’s a general question - What would be future course of share price ?

At first it would get corrected by few percentage points after issuance is now shares. What after that ??

For me Biz fundamentals of PPL are rock solid and 3 of 4 segments are Cash Generating machines.

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70

I dont see any rights in my Demat account, any one has axis direct and have received it. Which section you will find these rights. I just got letter from them some time back.

71

How to apply online, any help/guidance is appreciated.

I have a Groww account and can see PPARMRT in demat …

https://web.linkintime.co.in/RIGHTSISSUE/rightsissues-Knowyourapplication.aspx

But to apply, it shows a paper form.

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72

Also if anybody can guide for zerodha. I am unable to see rights entitlement.

Thanks

73

For Zerodha go to Portfolio → Holdings. You would see a 12 digit alphanumeric starting with INE0 followed by a number ( 5 *( number of shares you hold) divided by 46). Discount brokers that are not backed by bank do not have the option to apply from our trading account. You can use netbanking, the issue open tomorrow.

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74

You can apply from your connected Bank Account.

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75

Rights issue not getting listed in HDFC Bank and Kotak Bank . Any idea why its not listed ?

76

customer care people said wait for a while. either today or tomorrow it should be okay. linkintime people are not taking calls. very unprofessional attitude from all sides.

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77

we have to apply from bank account?
I thought it has to be from demat account.

78

One can apply directly from ICICI Direct account. Piramal Pharma rights issue is listed under IPO section of ICICI direct so its very easy to apply

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79

Query:

Trying to understand what will happen if one purchases the RE shares from the market?

What can one do with the additional RE shares that are purchased from the market?

Is there any arbitrage that one can get?

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80

Hi Sir
say I apply for RE and I got it.
post that, will I be asked to convert into shares or sell RE ?
or post getting RE, if I don’t do anything, they will be converted into shares automatically ?
Thanks

81

REs can be bought in the open market. Also, RE has been issued by the company as per holding on the record date.

You need to apply for the Right shares using ASBA. your bank account will be debited by the value of the allotted quantity. Remember to give the same DP ID in which you have the right entitlement or REs. You don’t have to convert RE into equity shares. They will expire automatically whether you apply or not. Basically, RE in your DP ensures you get a minimum allotment of shares (=to the number of REs held). You may apply for more right shares than REs you have, but the allotment will depend on availability / pro rata.

Regarding arbitrage, Rights is available at 81 + value of right which is around 15.50-15.75 at this time. so that makes the cost of buying the share through rights = (81+15.75) 96.75 which the share is trading at 98.55 about. So yes, there is a 2% arbitrage here. But I won’t trade this for arbitrage only.

Disc: Neglible Holdings / Not a registered investment advisor

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83

Thanks a lot for the explanation. So basically purchasing RE from the markets just means that I am assured to get allotted 1 lot if I apply for the rights.

Otherwise I wouldn’t be guaranteed to get that 1 lot right? I would get additional rights only if there is undersubscription.

84

Yes, that is correct. also 1 lot / 1 RE = 1 assured equity share, if you apply.

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85

If you can help me correct my thinking, would appreciate it; I’m an existing shareholder of PP.

  • I have got my RE shares in my demat acct today, say 50.

  • I dont do anything to the newly credited shares between 8th and 10th Aug

  • Through my bank ASBA route, I apply for 50 shares of PP through rights issue page

  • Since this is sent to the registrar who knows I’m an existing shareholder, I will definitely get the 50 allotted at Rs 81

  • Post Aug 10th, the shares recently added on 8th get extinguished

  • Post 16th and a week after, the allotted shares would get credited to my account

Is this correct?

What puzzles me is, can I sell the new RE shares and immediately apply through ASBA and still be guaranteed allotment?

86

Sorry, I’m lost here. If I get through rights allotment, I get it at 81, how does the cost become 81+15.75?

87

Pretty clear here, Watch it, Or google it with the same comments

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88

The RE will be checked on the date of allotment not on the date of application. So if you apply and then sell RE, you don’t get assured allotment. Yes, you may still get some shares in case of under subscription.

Cost of RE is added with you are buying REs from market. Eg. In case you are applying for rights issue because you want to invest in the company… Say you have 10 RE given by the company but you want to buy 100 shares. So either you apply 10 right shares and buy rest 90 from open market OR you can buy 90 REs and get 100 rights alloted by the company and get the share cheaper by about 2% (in this case).

89

Piramal Pharma Q1 results and concall highlights -

Revenues- 1749 vs 1482 cr, up 18 pc
EBITDA- 171 vs 89 cr, up 92 pc
PAT- (-) 99 vs (-) 109 cr

Sales breakup-

CDMO- 898 vs 770 cr, up 17 pc
CHG (complex hospital generics)- 617 vs 508 cr, up 22 pc
OTC- 239 vs 211 cr, up 13 pc

Successfully closed US FDA inspection at Pithampur with zero observations

Historically, H2 is better than H1 both iro revenues and profitability

Rights issue launched at Rs 81. Promoters subscribed to it fully

Launched 11 new products in the India - OTC business

OTC power brands- Lactocalamine, Littles, Polycrol, Tetmosol, I-range grew 15 pc & contributed to 23 pc of OTC business

Have raised 1050 cr via rights issue primarily for debt repayment

CDMO business witnessing continued order flow momentum. Generic APIs demand also improving

Witnessed string inhalation anaesthesia sales. Launched one new product ( in CHG business ) in US in Q1. More products lined up in pipeline

Recently expanded capacity at Grangemouth facility to help in Anti Body drug conjugate business ( in CDMO segment )

CDMO breakup of molecules -

Pre Clinical - 20 pc
Phase -1 - 25 pc
Phase- 2 - 12 pc
Phase-3 - 43 pc

Piramal Pharma is 4th largest inhalation anaesthesia company in the world wrt combined mkt share of - Sevoflurane, Desflurane, Isoflurane and Halothane

Has 40 pc mkt share for Sevoflurane in US

Saridon, Supradyn are also company’s popular OTC brands

Company has 49:51 JV with AbbVie for sale of Othalmology products in India. Strong presence in - Dry Eye, Glaucoma, Infections and Inflammation

Net Debt at end of Q1 at 4700 cr

It was 4800 cr at end of Q4 LY

In last 9 months, 05 of company’s facilities have cleared US FDA audits

Currently have a pipeline of 27 injectable products under development in the CHG business

In the CDMO segment, 35 products are in Phase-3 This can provide lucrative commercial manufacturing contracts for the company

Q1 capex spend-147 cr

Company to go slow on further capex to keep the Debt levels under control. As such, most of the capacity expansion is already done

Company expects the scale of business to expand signifigantly in H2 leading to better operating leverage and hence profitability

Company expects interest costs to fall significantly wef Q3 when the proceeds of rights issue are utilised

Sevoflurane comprises 80 pc of global demand for inhalation anaesthesia and is also growing well. Company currently can’t keep up with the demand, hence expanding/debottlenecking capacities of Sevoflurane

Expect most of the Phase-3 CDMO molecules to commercialise in next 3 yrs - this can be a big revenue/profitability driver in the future

WuXi, Lonza and Piramal are the only major players in anti body drug conjugates (ADC) Mkt. Their demand is steadily going up. Company’s expanded ADC facilities are expected to go live in H2

The new CHG product launched in Q1 in an injectable product

Disc: holding, biased

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