Piramal Health-LifeSciences Special Situation-update

Piramal Healthcare and Lifescience, both, made an announcement to the exchanges on 25th November about having received the high court sanction to the scheme. From the time that they made the announcement in May 2011, it has taken approx 6 1/2 months for the procedural work. This is the link to the announcement. http://goo.gl/KojrY

I expect that exchanges will make the announcement regarding the record date soon the record date may be about a fortnight away ( total time about 7 months). 

If you bought PLSL at the time of announcement and are either still holding it or have made a arbitrage trade like me should have seen good profits. If you were smart, you would have sold out PLSL above 90 and made a rather tidy bundle ( sweeter given that broad markets have been screwing us lately).

Curious to see how the FNO trade in PHC will be handled ( i.e would there be an adjustment)- I don’t have an idea about this and second what will be the price of residual  PLSL since it will continue to be a listed entity.

Why is Piramal keeping this company listed is a question that only future will answer but he may well transfer some pharma business to it going forward. 

I am of course long on PHC given that it is quoting at wide discount to cash ( what better safe haven than this in falling markets)


Happy hunting…….


4 thoughts on “Piramal Health-LifeSciences Special Situation-update

  1. For Capital gains calculations in future you need this reference price from the company. Don’t bother about it. Its not terribly important since long terms gains on listed equities are tax free anyways and the share price is not likely to rise in the short term

  2. Hi,

    One question. With the intention of holding PHL for long term i had bought it few month’s back, and then when i learnt about the PHL & PLSL merger and the price arb, i had bought few more of PLSL at avg 85/-.

    Now that the record date for de-merger is past us, i had one question on the tax angle.
    If i sell my PLSL shares now at say 7.50/-, will i get the benefit of short term capital loss to offset against the short term gains from other sells?


    • In this case, there is no benefit of short term loss since the buying price itself gets adjusted. So your buying price of 85 will be probably 6.5 (effective residual value). You will probably get a note from one of the companies and if you don’t then write to them and they will send it to you

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