Piramal Ent arm to acquire office space in Mumbai; stock surges

Shares of Piramal Enterprises surged over 2% to ₹912.65 today after Piramal Consumer Products Private Ltd (PCPPL), a wholly-owned subsidiary of the company, revealed its plan to acquire an office space in Lower Parel, Mumbai.

PCPPL says it entered into an agreement with AASAN Corporate Solutions Private Ltd (ACSPL) for the acquisition of Piramal Tower, an office premises situated at Peninsula Corporate Park in Lower Parel, Mumbai. The transaction is valued at ₹875 crore.

With regards to the transaction, PCPPL plans to undergo certain changes, including (a) a potential name alteration to "Piramal Tower Private Limited," contingent upon availability, and a modification to its object clause to encompass business activities related to acquiring, holding, leasing premises, and offering various services and amenities, it adds.

"This transaction will allow Piramal Enterprises and its subsidiaries to fulfil their future office space needs," the filing says.

The subsidiary's turnover for FY21, FY22 and FY23 was ₹71.27 lakh, ₹151.35 lakh, and ₹70.42 lakh, respectively. The company intends to utilise a certain portion of these office premises and expects to capitalise on space as and when it becomes available to meet the rising operating demands.

Additionally, Piramal Enterprises has made an investment of ₹289.59 crore in PCPPL through participation in the rights issue.

On December 21, 2023, after the RBI tightened rules governing alternate investment funds (AIFs), Piramal Enterprises Ltd (PEL) said it would keep aside funds to cover its exposure to such funds. "As of November 30, 2023, the value of investments by PEL and Piramal Capital & Housing Finance Limited in AIF units was Rs. 3,817 crores," Piramal Enterprises said.

Of this, says the company, ₹653 crore pertained to funds with no exposure to any debtor companies of Piramal Enterprises. Of the remaining ₹3,164 crore, ₹1,737 crore worth of downstream investments have been made by the AIF into 3 entities that are (or were in the last 12 months) debtor companies of Piramal Enterprises.

"Taking a conservative view of the regulatory intent, PEL intends to adjust the entire ₹3,164 crores in our financial statements through capital funds or provisions. We are engaging with relevant stakeholders to finalise the details," said Piramal.