Piramal Enterprises Gains 2% After Subsidiary Pays Rs 875 Cr to Purchase Mumbai’s Piramal Tower

After its subsidiary bought Piramal Consumer Products Private Ltd (PCPPL), which is acquiring Piramal Tower situated in Peninsula Corporate Park, Lower Parel, Mumbai for Rs 875 crore, shares of Piramal Enterprises rose over 2 per cent to achieve the day’s high of Rs 922 on December 27.

“We would like to notify you that our wholly-owned subsidiary, Piramal Consumer Products Private Limited (PCPPL), has reached a deal with a promoter group company, AASAN Corporate Solutions Private Limited (ACSPL), for the purchase of Piramal Tower (Office Premises) situated at Peninsula Corporate Park, Lower Parel, Mumbai, for a sum of Rs 875 crore,” Piramal Enterprises stated in a regulatory filing.

Compared to the benchmark Sensex’s 18% increase so far this year, the shares of this diverse non-banking lender have risen by more than 10%. On September 11, it reached a 52-week high of Rs 1,140 per share.

According to the filing, “Piramal Enterprises and its subsidiaries will be able to meet their future office space needs thanks to this transaction.” For FY21, FY22, and FY23, the subsidiary’s revenue was Rs 71.27 lakh, Rs 151.35 lakh, and Rs 70.42 lakh, in that order.

In order to accommodate its expanding operational needs, the firm plans to employ a certain amount of these office spaces and hopes to profit from more space when it becomes available.

JM Financial analysts gave Piramal Enterprises a “buy” recommendation, with a target price of Rs 1,250 per share. “Over FY24–25, we think Piramal Enterprises should be able to generate an average core return on equity (RoE) of 0.7%. The brokerage business said that strategic changes at important leadership positions, tighter risk regulations, and significant process enhancements should guarantee sustained growth and profitability.