Revisiting my earlier hypothesis with subsequent developments
I subscribed to the rights issue just for kicks and also applied for more than my allocation. (20 percent more)
I got the full allocations including the extra.
Stock price has gone up 80 percent from issue price (81) to 140 presently.
Rights issue was fully subscribed and I read that the promoters applied for more than their current holding so they were able to increase their shareholding at a lower cost.
When the companies demerged into PEL and PPL i think there was a lot of bad loans on the balance sheet of the financial arm so more than proportionate debt was passed on to PPL and therefore PPL had to deleverage while PEL rebuilt it’s balance sheet with lower NPAs.
From a company strategy and promoter interest point of view this is demerger was very well executed but minority shareholders not so much.
Nandini piramal has started appearing in media interviews and the company PR will build her up to a well known well regarded business leader in the coming days.
For those who may not know the she is married to the current CEO and she handles the non core activities of the business ( QA, HR etc)
With Ajay piramals guiding hand over time this company will do well , whether that works for minority shareholders or not is a separate question
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