Status Update

Oct 7, 2021

Ladies and gentlemen, good day and welcome to Piramal Enterprises Limited Conference Call to discuss on announcement of demerger and simplification of corporate structure. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Hitesh Dada, Chief Investor Relations Officer from Piramal Enterprises Limited. Thank you and over to you sir. Hi, good evening everyone. Hope you are safe and in best of your health. I'm pleased to welcome you all today to this conference call to discuss the announcement that we made today on demerger and simplification of our corporate structure. Our demerger announcement materials have been uploaded on our Web site and you may like to download and refer during our discussion. As the company is in the silent period prior to the quarterly earnings release, the management will not be commenting on its earnings prospects or provide any new guidance or any other material non public information pertaining to the company's current financial performance. On the call today, we have with us our Chairman, Mr. Rajay Piramal Mr. Nandini Piramal, Executive Director, Piramal Enterprises and Chairperson, Piramal Pharma Mr. Anand Pyramal, Executive Director, Pyramal Group and Mr. Rajesh Laddha, Executive Director and Group CFO, Pyramal Enterprises. With that, I would like to hand it over to our Chairman and would request him to share his initial thoughts. Over to you, sir. Welcome to our analyst call. Over the years, our company has grown multifold with diverse businesses under one holding structure. Over the last 33 years, we have delivered a revenue CAGR of 22%, a net profit CAGR of 26% and annualized returns to shareholders of 26%. In line with our stated strategy, we have announced the demerger of the pharma business and simplification of the corporate structure subject to shareholders, creditors and other regulatory approvals. This demerger will create 2 separate pure play entities in the fast growing verticals of financial services and pharmaceuticals, in line with our commitment to the shareholders and investors. The key steps are in this the pharmaceuticals business will get vertically demerged from Piramal Enterprises Limited and consolidated under Piramal Pharma Limited. Piramal Pharma Limited will become one of the large pharma companies listed on the MSE and BSE post the demerger. 2 wholly owned operating subsidies, Hemopharma Private Limited and Convergence Chemicals Private Limited will also get amalgamated with Piramal Pharma to further simplify the pharma corporate structure. In consideration, PPL that is Piramal Pharma Limited shall issue 4 equity shares of PPL for every one equity share in Piramal Enterprises in addition to their current holding in PPL. Thus to really simplify, every shareholder of PPL will now at the time of the demerger get 1 share in PEL and 4 shares in PCL and both of these companies will be separately listed on the NSE and BSE. In the financial services space, we had 200% wholly owned subsidiaries, PCHFL, which is Piramal Capital and Housing Finance Limited and Piramal Fininvest. PCHFL has now merged into DHFL and that has now become a 100% subsidiary of PEL. And Piramal Fininvest, which was 100% subsidiary, is now being merged into the parent Piramal Enterprises. This sounds complicated, but actually it is really to simplify the structure. So in Financial Services, we will have 1 NBFC, which is Piramal Enterprises Limited, which will hold 100% of shareholding in the merged entity of Piramal Capital and PHFL. And the listed entity will be PEL, which is there today as well. This scheme of arrangement is subject to the approval of all the regular approvals, shareholders and creditors, RBI, SEBI, Stock Exchanges, the Honorable National Company Law Tribunal and other regulatory authorities as applicable. We expect that this regulatory process all the approvals which I have talked about now should get done in a 9 to 10 month period. Also these we believe are fairly routine approvals and these are approvals which will only benefit minority shareholders on one hand and it will help the regulator have a simplified structure and better regulation. Now coming to the strategic rationale. As you all have been asking at every analyst meeting that when will the demerger take place. So you know the rationale, but I will tell you from our point of view. The first one is it simplifies the corporate structure with 2 separate peer placed entities in the financial services and pharmaceutical space. It strengthens governance architecture for the businesses with separate dedicated boards and management teams. We're also creating an optimal capital structure. As you know, the capital structure for our Financial Services business compared to that of our Pharmaceutical business is quite distinct and therefore we have an option. Today we have an opportunity to create what is an optimal structure. There's also a clear deployment of respective businesses' cash flows. Again another requirement of many analysts and investors telling us that they would like to understand cash flows from each business and whether there was an intermingling of those. So here is now a clarity in that. And it gives both entities the ability to independently pursue growth plans organically and inorganically. As you would see from the material that has been given to you, both the businesses are now adequately capitalized and there is a good runway for growth both organically and through acquisitions for the Financial Services business as well as for Pharma. And we believe that this would also enable better understanding of our 2 listed entities by you, the investors and the analyst community and would lead to better reporting of operating parameters for individual entities. So what is the implication for shareholders? Just to clarify once again, shareholders of PEL today will directly own shares in both the listed entities without any cross holdings and minority stakes. Also, there will be no change in the shareholding pattern of Piramal Enterprises. We have been, as you are aware, been talking about this merger for the last few years and I have been consistently saying that in the mid term, we will separate out these 2 companies to 2 businesses into 2 independent companies. And over this period, we have been preparing for this. Over the last 2 years, we've taken several measures to come to this stage. First of all, as you are well aware, we strengthened our balance sheet by getting inflows equity inflows of INR 18,000 crores since March 2019 against our commitment to you of getting INR 10,000 crores. Secondly, we have deleveraged the company. Today, on a consolidated basis, PL's net debt to equity has reduced to 0.9 times in March 2021 versus 2 times in March 2019. We have divested our non core businesses with the sale of DRG. We brought all the pharmaceutical businesses under one company last year, PPL and strengthened its balance sheet by raising $490,000,000 from the Carlyle Group for a 20% stake in the pharma business. We've grown our multiproduct retail lending platform in line with our strategy of diversifying our book into both retail and wholesale And this is further enhanced by the merger of DHFL, wherein our book in the near term would be 50% retail and 50% wholesale. And now we have a much more robust and future ready financial services business. We have further strengthened our Board and management teams across the pharma and financial services space. In summary, the demerger and simplification of the corporate structure will create 2 independent listed entities in the financial services and pharmaceutical sector and both entities will have a leadership position across the business segments they operate in. All my family members and I will remain fully committed towards growth and stability of both the listed entities. The demerger also empowers both businesses to be future ready by independently pursuing their growth strategies with sharper focus on their strategic priorities. I am confident that both these entities will emerge as 2 strong companies which will have a good runway for growth. Going forward, in line with our philosophy of doing well and doing good, both the listed entities will continue to work towards creating value for our shareholders. With this, I would I'm open to questions. Me and my team are all here for you And thank you very much once again for participating. Thank you very much. We will now begin the question and answer session. The first question is from the line of Aditya Jain from Citigroup. Just a couple of clarifications. So one is if you could talk about who will be the leadership team at both the listed entity? And secondly, of PEL, which will become a listed NBFC, so PC HSL is its only hold for. And every other subsidiary, which used to be doing pharma business or otherwise, it's getting it will be within Piramal Pharma Limited. Just wanted to confirm that. Those are my 2 questions. Yes. So let me confirm that all the pharma subsidiaries and all the pharma business, whatever was in PEL will be part of Pyramel Pharma Limited. So there will be no intermingling between them. The management of your first question, the management remains unchanged. Piramal Pharma Limited is run by CEO, Mr. Peter De Jong and will continue to do so. As far as PEL is concerned, it will continue to be run as before. We have in the retail business of DHFL, we have Mr. Jairam, who is the Managing Director of that business will continue. The wholesale business, we have Mr. Khushbu Gijina and his team that will continue. And overall, Rajesh Ladai and his team will also continue. So it will remain unchanged in that sense. Got it. Thank you. Thank you. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yes. Congratulations for 2 updates in terms of the SFL integration as well as the demerger announcement. So a couple of questions. Firstly, in terms of the network, so the excess network, which was there, maybe last time we have clearly allocated the network towards the pharma. So that's the only thing that is flowing into the pharma entity which will be demerged and the entire excess network which was there unallocated equity. That will stay with Financial Services or it depends upon the organic inorganic opportunity in both the businesses? So about of the total net worth, about INR 6,800 INR 7,000 INR 7,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 INR 1,000 out of which the 100% subsidiary, which is PCHFL after the merger of DHFL will have an equity of about INR 11,000 crores. And that will remain with PCHFL and will be used to grow the retail book. The balance equity remains in PEL. So if you look at it, there's enough equity both in the pharma space where the equity where the EBITDA to equity sorry, the debt to equity is in the region of a little over 2x. So there is enough scope to grow there. Similarly, if I look at PCHFL alone, after even the merger of DHFL, the debt to equity will be 3.5x. So we are adequately capitalized in both and there is still excess unallocated equity left in Piramal Enterprises. Yes, sure. So just broadly maybe in terms of INR 35,000 crores of equity, what you are seeing is INR 11,000 crores will be in PCHFN, INR 700,000 crores in pharma and INR 17,000 crores will be at the PEL level into the NBF-six. So that's the Yes, yes, roughly, yes. Okay. And in terms of the cash also, which is normally lying in the balance sheet of INR 700,000 crores. So would that be more towards the Financial Services business or that's pertaining more to the pharma business? No, that is pertaining to the Financial Services business. That is all the regulatory requirements which RBI has and a little more excess. Okay. So that cash will also flow into the financial services? Correct. Okay. And secondly, in terms of the structure which we are looking of the MLD meeting PHLP Invest into PEL and then having 100% subsidiary, any regulatory challenges that we see in terms of the approval over there? So, obviously, it is subject to RBI approval. We believe that RBI would be happy with this, but we will wait and see because in that case, today there was some lending which was in PHL Fininvest, something in PCHFL and a little bit in PEL. And RBI was not very happy with that. Here now we are consolidating the lending into 1 NVSE and 1 HFC. So I presume they will be happy, but we will wait and see for their reaction. Sure. And in terms of the funding cost benefit, so that will still flow through because retail will still sit at the CHFL. So the funding cost benefit will ideally flow to the CHFL and not at the Piramal Enterprise. I think that funding cost will still continue to be there because wholesale book is still lying and people will view it as somewhat similar what is existing today. We think overall weighted average cost will come down across the board in Financial Services. Okay. Sure. And last question in terms of any tax implication on this demerger? There is no tax implication as far as this demerger is concerned. Okay. So there will be no okay. So there will be no liability, nothing which will get created, Gumbel, that is nothing which is going to happen out there? No. Okay. Okay. Yes. Thanks a lot. Thank you. The next question is from the line of Prakash from AXIS Capital. Please go ahead. Yes. Hi, good evening. Thanks for the opportunity. Just wanted to understand, I missed the comment already discussed on the cash. So what is lying in the pharma books today? And we have in the past said that we would need some funds for the CapEx as well as some inorganic opportunities There we see some gaps in terms of service offering to scale up further and also scale up the OTC business. So we have a strong growth plan on the pharma side. Just wanted to understand, A, the cash position today and B, which are the first few initiatives that we can see in these businesses? As far as the pharma is concerned, if you look at the debt to EBITDA, there is enough scope for growth. Today, the debt to EBITDA is about twice, a little over twice in spite of doing a 7.50 crore acquisition in after doing a 7.50 crore acquisition in June of this year. So there is enough runway for growth, both for acquisitions as well as for organic growth. Just for your information, in the last year, in the last 12 months, pharma has seen 3 acquisitions that we have done. Hemo, which I spoke about, which was done in June this year and last year, we did 2 of them. We acquired a plant in Sellersville in Pennsylvania, the U. S. And we also acquired 50% of the balance shareholding of our joint venture with Navin. So totally, in spite of that, our debt equity today is still conservative and there's scope to grow. Yes. And rough numbers would be, sir? Of? Of the Pharma debt to equity, I mean the absolute number. So the Pharma EBITDA this year will I mean, can I give the last year number? I think that's safer. It will be about INR 1500 crores. I just wanted to know the debt levels as well as INR 3000 crores. INR 3000. INR 3000. INR 3000 is the? Pharma. Yes, roughly about INR 3,200 crores. Off debt? Yes. And the equity base being? Equity base is about INR7000 crores, INR6800 to be precise. Okay, okay, perfect. Okay, that helps. Thank you so much. The next question is from the line of Satwik Jain from Perennial Funds. Please go ahead. Yes, thank you. So it had already been discussed regarding the debt level. So just wanted to clarify like going ahead, are there any plans to reduce the debt, become debt free in the pharma business especially? And the second thing was, are we planning any reentry into the domestic formulations business? Thank you. So pharma, we don't have a plan to reduce debt too much. I think this is a conservative level. We'd rather put funds into growth. I think that will give a better return to shareholders, and that's what we want to do in the pharma space. There's enough of a headway to grow. There is opportunities for growth and we'll invest in growth. There will be cash flows coming in, but I think we want to reinvest in the business for some time. And what was your second question? So the second question was regarding any reentry into the domestic formulation business. We have we've been evaluating it. If it makes economic sense, we would do it because valuations are pretty stiff. And I keep saying that we as a business, we are not like a private equity who will enter it something, the exit multiple goes out, they exit in 3, 4, 5 years depending on the multiple. We want to grow a solid business, which will continue in the long term as we've done in the past. So there is we believe that if there is a we believe that it's a good space to enter in if the value is right. So we will evaluate on the terms of valuation. Right, right. Thank you so much. That was all from my side. All the best. Thank you. Thank you. The next question is from the line of Utsav Mehta from Edelweiss Asset Management. Please go ahead. Good evening, sir. Thanks for taking my question. My first one is we've seen like a very strong consolidation of both businesses over the last 2 to 3 years. Could you just talk a little bit about from now to let's say 3 years now, how do you see your ROEs moving in each of the businesses? And when do you believe we'll be able to sort of hit and break the double digit barrier in both? So I think we'll share numbers much more later, but we are focused on that. We are if you look at it, it's just part of a long term strategy that we were doing and I think we are in that line. We have now strengthened both the businesses in terms of equity. We believe that there are many opportunities for stronger companies to grow into the future, opportunities both in the organic space as well as through acquisitions. If you look at financial services as well, I see a consolidation taking place on a daily basis. Those companies which have strong equity and have access to have good access to debt levels, I think there are going to be many more opportunities to come. So we are just waiting for that. If you look at it, we have been able to easily absorb this acquisition of DHFL, which is a large acquisition. It is a 34,000 crore acquisition and we've been able to digest it in terms of financial terms quite easily. So I think let's be patient, you will see the improvement coming through. There is higher power there and we will continue to grow now. Great. Thank you so much for that answer. My second question is on the question asked earlier on the domestic formulations and potential entry into it. I understand the valuations are still. Could you just help us understand what are the kind of payback periods or rebates that you're looking after looking for? I mean, I can't give you too much details now otherwise, but let me say that till now we've had a successful record of doing acquisitions, integrating them and creating value. That's what we will do. So it varies. The payback period really varies depending on where we think the future will be. So let's leave it at that. Okay, wonderful. Great. Thank you so much for your time and good luck. Thank you. Thank you. The next question is from the line of Biran Engineer from CLSA. Please go ahead. Yes. Thanks for taking my question and congrats on the successful execution of all your plans over the past 2 years. I had a follow-up question on one of the things that was said. So, you mentioned that the debt to equity ratio in PCHFL will be 3.5x on an equity of INR 11,000 crores. Yes. But if I look at as of FY 2021, PCHFL anyway has INR 30,000 crores of debt and now from D1, they are taking over another INR 20,000 crores. So, INR 50,000 crores, it comes to almost INR 5. So, what exactly am I missing here? Rajesh, you could answer the question. Yes, I'll take that. These numbers what Mr. Piraman has just given us pro form a numbers between March 2021 now and say another 2, 3 months the debt levels of BCHML on standalone basis is coming down because of the fact that some of the down selling etcetera which is happening from BCHML. So as we speak it will be in the range of about NOK 25,000 odd crores. NOK 20,000 is coming from NOK 19,500. And by next 3, 4 months, 5 months' time by March 2022, it will be down by another NOK 5,000 is what our expectation is. So on a pro form a basis like to like post the HFF in next 3, 4 months' time, we expect this to be around INR 40,000 crores. Okay, that's fair, guys. Thanks. And just one other question, In the future, would you be also looking to merge the HFC with Panamal Enterprises or it would always be a standalone HFC as a subsidiary and NPSC as a whole No, that just gives us flexibility. We will see how it comes and how the future plays out to be. It just gives an option. If you want to merge, you can merge. If you don't want to, so we'll do whatever as we've done in the past, whatever is in the best interest of all shareholders and the business. Kiran, I will just add that our HFC is well positioned in now the affordable financing market, affordable housing finance market apart from the specialized wholesale play that we had. So I think these are 2 really good areas where we will continue to focus on to grow our HFC apart from the multi product strategy that we will have on at the overall financial services level. No, no. Yes, I guess, it's just that since we are simplifying the group of consolidating things, I thought maybe that's the next step. But anyway, that answers my question. Thank you so much. Sir, Engineer, you have any more questions? No, no, I'm good. Thank you, sir. Thank you. The next question is from the line of Abhijit Thirawal from Motilal Oswalasat Management. Please go ahead. So thank you so much for the opportunity and congratulations on this announcement. So two questions here. So firstly, will it now be fair to assume that we'll be doing all the housing and the Allied products through our HFC subsidiary, which is PCHFL and all the other retail products and that we talk about in the nonrealistic wholesale lending. On the retail side, we talk about doing SME loans, used car loans, education loans, some of the unsecured personal loans. Will they all be housed on the holding Piramal Enterprises balance sheet now? By and large, yes. But don't I mean, I want you to look at it as a consolidated basis between Piramal Enterprises and PCHFL. That is a fairer and better way of doing it. But the direction what you are saying is right, but it's not going to always be like that. So I don't want to put a black line that this is what will be on this side and the other. So just there will be some flexibility, but so look at it on a consolidated basis. So the other question was, I mean, in June quarter when we reported our results, there was an unallocated equity including investments in the Shiram Group of about INR 11,300 crores. And I mean, sometime back, you said that we'll be having 11,000 crores of equity in PCHFL, another 17,000 crores in PES. So is it fair to say this unallocated there is no more unallocated equity that remains now and large part of this unallocated equity which was there has been kind of allocated to PEL now? Yes. So PEL is really unallocated only because there's hardly any debt at the end of the year. We will not have significant debt. So we'll see what to do. Yes. Okay. And maybe the last question here, are we now in a position to kind of disclose, I mean, what is the quantum of wholesale and retail loans separately, which will kind of come on our balance sheet now after the consummation of this transaction? And sir, what are your maybe thoughts around this life insurance business that's coming along with DHL? So, we will be in a position to answer the difference between wholesale and retail when we give our 6 monthly results because the auditors and us, we will discuss that and finalize that. Let's say as far as DHFL is concerned, most of it will be only retail because we have not we have bought wholesale at a much lower valuation and we'll continue to reflect that. But the numbers you will see later. And what was your second question? Sir, what was the cost of all this life insurance business? For life insurance, we are still debating what to do. There are options available with us. All the options are open with us today. And that was not an area of focus till now we were just doing the DHFL. We were valued it on the basis of the existing book. Now we are looking at it. We are also in talks with Primerica, which is a partner and then we will decide what to do. Perfect. And sir, thank you for that and maybe last follow-up question here. This INR 65,000 crores of loans that we have disclosed in our presentation, I am assuming this is at the Piramal Financial Services level, right, and not just PCHFL? Yes, it's a consolidated number. Sir, which is to suggest that, I mean, from that INR43,000 crores number that we reported as on June and again, the INR 65,000 crores number is also pro form a as on June. Yes, yes, this is INR 65,000 crores, please say it's approximate. But as I said, the real numbers you will come to know at the end of this quarter when the quarter results are there. Got it. Thank you so much. This is very useful and all the very best of luck. Yes. Thank you. The next question is from the line of Alpesh from IIFL Capital. Please go ahead. Yes, hi. Thanks and congrats for the successful execution of Revlon. Just one question, most of the questions have been answered. There was, if I'm not wrong, there was at the time of in the earlier mergers and the financial services level, we had around INR10,000 kind of a goodwill at DPC HFL level. So does that still remain or it would be now lost given this entire market process? That will continue on the balance sheet as we said. That will continue on the balance sheet as it is. That will continue on the balance sheet as goodwill. And corresponding to that, we have the net worth as well capital reserve, but we don't count that net worth when we are giving the net worth numbers to you. Okay. That's not available for TRIR purposes. So we don't count that number when we are disclosing the other network number or the net network number to you. Okay. And the another question is, why are we in the sense at the hold hold level and the PEL level, we are still planning to go ahead with around INR 20,000 kind of a networking to allocation to that business, whereas the Piramal spin invest, I think so the loan book is less than around 10% 100 Euros, if I'm not wrong. So any rationale of keeping such a high capital at that level rather than allocating it to the housing finance subsidiary more, which is going to be How does it matter? It makes no difference. It's a consolidated balance sheet. We want the housing finance company to really run on its own. Otherwise, they get spoiled with too much capital. So that's an internal discipline we want to keep. As far as you are concerned, you could do even consolidated. Okay. Got it. Yes. Okay. Makes sense. Thank you so much and all the best. The next question is from the line of Bharat Sheyb from Quest Investment. Please go ahead. Sir, just to understand now with this DHFL in our poll, whether there will be a this PCHFL will be a reverse merger as we were discussing or if you can share any thought on that? Yes, it is a reverse merger. It's happened now. PCHFL has merged into DHFL and now we've asked for a change of name of DHFL. And now what will be the benefit of this absorbed tax loss which was sitting on DHFL book? So we will get the benefit. Okay. Thank you very much. Thank you. The next question is from the line of Tushar Manu Dhanee from Motilal Oswal Financial Services. Please go ahead. Yes. Thanks for the opportunity. So while you alluded to your plan to reenter into domestic formulation, just would like to understand why you are present across the value chain of synthesis based CDMO opportunities. Are there any plan to at least go into inorganic way for the Biologics space CDMO given that that is one of the key lever of growth to be seen over the next 4 to 5 years at the industry level? So we believe that even in the chemical basis, there's enough lever of there are enough growth opportunities as first. So it's not only Biologics which makes the growth in these areas as well. There's a lot of growth happening. So that's one. 2nd, Biologics, let us see if we get a reasonable acquisition, we will look at it. We do look at it, but frankly, the valuations of biologics are very high today. And so if it makes sense, we will do it. See, I just want to tell you again and again the same thing that as far as acquisitions are concerned, we have a lot of discipline in our mind. Maybe you may think we are conservative, but I think that has held us in good stead for so many years. So we want to continue being conservative and creating value from all our acquisitions. That's the overall approach. And till now, you've seen it has paid results. Just to go back in history, we sold our domestic formulations business in 2011, if you remember, for $3,800,000,000 Now in the next 10 years, we've been able to build a similar sized business and through both organic as well as inorganic means. So we will continue on that path. Sure, sir. That helps. Thanks a lot. Thank you. The next question is from the line of Kunal Damesh from MK Global. Please go ahead. Good evening and thank you for the opportunity. So first question on if you could share the gross block in the Pharma business that would help gross block and the fact for FY 2021? Rajesh, what is the gross block? So it's about INR 6,000 crores. It's not gross, it's net flow. If you want, we can separately share gross and depreciation numbers etcetera. But this is a net loss as of maybe 30th September, which is today. Sure. And can you also share the PBT or TAC number for Pharma Business for FY 2021? I think we'll avoid answering too many number questions given that the results are not this is not the results call. So request to ask all your number related questions more on the results call. Sure. And the second question is more on the pharma business, the outlook in terms of the acquisition. So we have done 3 acquisition in last 12 months. So in terms of capabilities or in terms of the growth driver, are we there in terms of where we want to be or we can see some more capability building acquisitions going forward? No, we will continue. In the CDMO space particularly, there are very niche areas that you can get capabilities. And sometimes if we buy those acquisitions for the capability that we have well as the customers we have. So that we continuously look for. So there will be opportunities all the time. Sure. Thank you. Thank you. The next question is from the line of Devanshi Ashar from Sheila PMS. Please go ahead. Devanshi Ashar, your line is in talk mode. Kindly go ahead with your question, please. Now can you hear me? Yes, ma'am. Yes, hi. Congratulations, sir, for this. And it's great that you have been talking to us that you would be simplifying the process and now we have done it. But yes, all my answers are mostly answered. I just wanted to understand that last time when we sold 20% of the stake to Karyal, that was what valuation and now at present after this structure, what will be the proximity value for the Pharma business? So I can tell you the first part of your answer. It was at 2,800,000,000 valuation. The second part is for you all to tell me or the markets to decide. We don't know what the valuation will be. Let's we'll wait and see. Thank you so much. Thank you. The next question is from the line of Saresh Surya from PMS Vantage ImpEx Private Limited. Please go ahead. Good evening. For clarity, convergent to you for the merger. Now is there any plan to acquire any private sector bank by takeoff? Only we will keep an eye and let's see. My answer is the same. First of all, if it makes sense and value then we will do it. But I just want to remind you that we also have to now do the real integration where the work comes for the DHFL. So that is a job we are doing. This is only the structuring that has been we have done. That job is done. The actual integration is still to be done. Actually, it may be more beneficial to the organization, sir. That is very much a safer marketplace for the private discipline. Okay. Thank you. We will keep on talking about the Yes. We will look at it. Thank you. Thank you. The next question is from the line of Hatem Brochwala from Union Mutual Fund. Please go ahead. Yes. Hello, sir. Thank you for the opportunity. So my question is on DHFL. So it seems from the presentation is that we are getting a book of roughly INR 20,000 crores from DHFL. And for this transaction, we are paying net INR 23,000 crores and ex of cash which is already there on the DHFL balance sheet. So there will be a gap of roughly INR 3,000 crores. So this INR 3,000 crores will be reduced from the net worth. Is that the right understanding? Rajesh, just explain it. There is no reduction on the network. So what we are doing what has been done is whatever cash was lying on the balance sheet of DHFL as of 30th September, that cash has been used up and the balance funding has been done by BCSFL, which was approximately INR2,000 crores as of 30th September. So there is no impact on the balance sheet. But we'll be paying R23,000, right, to the HFL, the lenders? No. We have INR 34,500 was the total consideration out of which we have issued debentures to the extent of about INR 19,500 crores, right. So that is about balance is about INR 14,700 crores of cash which we had to settle. And I'm saying we've got cash of about INR 12,500 crores on the balance sheet of DHL. So the balance cash which got discharged at about INR 2,000 crores as I said this September. So the total NCDs plus cash out of our balance sheet is INR22,000 crores, right, which we have paid? Roughly, yes. Less than INR22. Okay. But just a question because we are getting a book of INR 20,000 crores. So there will be still a gap of INR 2,000 crores. No, no, no. We have not said INR 20,000 crores. That purchase price allocation is yet to be done as Javan mentioned earlier. We haven't closed the accounting part of it. I'm just giving you a reconciliation of what how consideration was discharged. Now we'll do a total accounting of R34500 which is a consideration amount and allocate it to various assets including retail book, wholesale book, insurance business and cash itself, which was there on the ASFL's books. Just wait. I think you just wait until the when the accounts are published. Yes, yes. Okay. Thank you. Thank you. The next question is from the line of N. J. Kumar from Prime Securities. Please go ahead. Hi, good evening and congratulations to the entire team, Mr. Biramal, for an outstanding acquisition. From a stock market valuation perspective, just wanted to understand. This 35,000 crores that we have, the total net worth, 6,000 as you indicated has gone to the pharma business from that we valued separately. It's fair to say therefore that it's not really relevant where this 29,000 crores balance resides because it needs to be seen as a financial services business with a total book value of INR 29,000 crores and the price to book multiple of that being the effective valuation that we need to arrive at? I guess that's how you can look at it, yes. Because from your perspective I would say 7,000 in pharma, balance is in this, but yes. That would be the simplest simpler way of because along with the simplification of the business is also a simplification of the valuation because when it was combined, I think people weren't clear how to value this the composite. So this could and this INR 28,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 29,000 INR 20,000 INR 29,000 INR 29,000 INR 20,000 Between PEL and the subsidiary, that's in Financial Services, but maybe for tax purposes, the subsidiary may remain as DHFL or PCHFL depending on the name change, so that the tax advantages remain there. Yes. That's it. Just wanted to have a sort of a two line, this thing of this. But congratulations again, it's a fabulous acquisition. All the very best. Thank you. Thank you. The next question is from the line of Anurag Jain from Green Lantern Capital. Please go ahead. Yes. Thank you so much. Congratulations for the combination of the congratulations. Just two quick questions. This PEL has transferred around 5.65 odd growth of pharma business into PPL. Was this already part of the Carlyle transaction earlier? Rajesh? So the way demerger has been planned, when we subsidized the business last year and got Carlyle into PPL as 20% stakeholder. We had retained some part of the business, 1 plant and OTC distribution business in PEL. Now since we want to transfer all the businesses and its subsidiaries to a separately listed entity, we are transferring lock, stock and bell. So Mahat, plant, OTC Business, investment into PPL, all subsidiaries in the PPL are now getting merged into PPL and then PPL is getting a separately listed entity. Understood. Why I was asking this question was because the Carlyle stake still remains 20% overall of the merged entity. So was it valued earlier, this business that we are trying to The stake will slightly go up and there will be about 0.1% to 0.15% difference which will come in Carlyle stake. Okay. It goes up. Okay, okay. Sure. Thank you so much. So just last question, in terms of timeline, what is your sense now from here on in terms of listing of both entities? What is your sense how are you planning that the same? We expect all these regulatory approvals will take about 9 months. Okay. So not this financial year? No. Okay. Thank you so much. That's all from my side. Thank you. The next question is from the line of Janish Jada from Spark Capital. Please go ahead. Good evening, sir. A couple of questions on the financial services front. A, what will be the merged entity like DHFL Plus Financial Services of Piramal, the NPA numbers estimated? We will tell you all that. We are still in the process of finalizing the numbers with the auditor. So just please wait for the 6 monthly results and all this we'll be able to tell you then. Okay. And the capital breakup, I just missed what will be the debt on the Financial Services and on the pharma business, Jacob? Rajesh, you can give that number. Pharma, we have just said that would be about INR 3,200 INR 3,300 INR 3,300 INR. That will be gross or net? Net. Okay. And Financial Services overall debt between PEL and BCSFL would be around crore to 45,000 crore. Okay. Thank you so much. Thank you. Ladies and gentlemen, due to time constraint, we take one last question from the line of Kunal Shah from ICICI Securities. Please go ahead. Yes. Thanks. Just one last question. Our review last time has been in terms of this unallocated equity. We will keep it unallocated and maybe we will utilize it for new businesses or inorganic opportunity or return to shareholder. But now with this, maybe is it like it's fairly allocated between PEL and PCHFL, okay? So I'm not sure if 17,000 odd crores in PEL is towards the wholesale book. And again, 11,000 odd crores is in terms of the retail plus some proportion of wholesale over there. And this unallocated equity is now getting utilized compared to that of narrative that it will not be used for DHFL transactions or into the financing business? No, no, it's not allocated. The total book even after merger of Fininvest in PL, the total AUM will be 10,000 Envest. Okay. In CEL, it will be 10,000 or less. So still maybe the equity allocated so there will be unallocated equity sitting at CEL level? Yes. Okay, perfect. This is very useful. Yes, thanks. Thank you. I now hand the conference over to Mr. Itay Datta for closing comments. Over to you, sir. Thank you, everyone. If you have more questions, we will take we'll be happy to take it up. And then financial questions and other questions related to results, we'll take it close with those announcements. Thank you. Thank you. Ladies and gentlemen, on behalf of Piramal Enterprises Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.