Piramal Enterprises Limited (PEL) has announced that the final hearing for the sanction of its composite scheme of arrangement with Piramal Finance Limited (PFL) is scheduled for August 22, 2025. This development marks a significant step in the proposed merger between the two Piramal entities.

Key Details of the Announcement

• The National Company Law Tribunal (NCLT) Mumbai Bench will conduct the final hearing.
• The scheme involves PEL, PFL, and their respective shareholders and creditors.
• PEL published newspaper advertisements on July 24, 2025, in Business Standard (English), Jansatta (Hindi), and Navshakti (Marathi) regarding this final hearing.
• The advertisements were published following NCLT orders dated July 11, 2025, and July 18, 2025.

Background of the Merger

The proposed merger comes in the wake of significant changes in PFL's operational structure. As of April 4, 2025, PFL transformed from a housing finance company to a Non-Deposit Taking Non-Banking Financial Company (NBFC).

Implications of the Merger

The merger is expected to consolidate the financial services businesses of the Piramal Group. It aligns with regulatory requirements and strategic business objectives:

1. Regulatory Compliance: The merger addresses the Reserve Bank of India's (RBI) regulation allowing only one NBFC-Investment and Credit Company (NBFC-ICC) per group.

2. Strategic Consolidation: It aims to combine PEL and PFL's operations, potentially leading to operational efficiencies and a stronger market presence.

3. Listing Requirement: Post-merger, PFL is expected to be listed on stock exchanges, providing direct ownership for PEL shareholders in a unified listed entity housing the lending business.

As the final NCLT hearing approaches, stakeholders will be keenly watching the outcome of this significant corporate restructuring in the Piramal Group.

Piramal Enterprises Limited (PEL) has announced significant modifications to the terms of its Non-Convertible Debentures (NCDs), affecting both the coupon rate structure and mandatory redemption criteria. The changes, approved by the company's Administrative Committee, apply to NCDs issued under ISINs INE140A07831 and INE140A07849.

Revised Coupon Rate Structure

The company has implemented a dynamic coupon rate system linked to its credit rating:

For Downgrades:

• 0.25% per annum increase for each notch below AA down to A+
• 1.00% per annum increase for downgrades from A+ to A

For Upgrades:

• 1.00% per annum decrease for upgrades from A to A+
• 0.25% per annum decrease for each notch from A+ to AA

This revised structure aims to align the interest rates with the company's credit risk profile, providing a balanced approach for both investors and the company.

Updated Mandatory Redemption Criteria

Piramal Enterprises has also modified its mandatory redemption event clause. The company will now be required to redeem the debentures if:

• The long-term credit rating is suspended or withdrawn
• The rating is downgraded to or below A- (four notches below the current AA rating)

This change provides additional security for investors by ensuring redemption in case of significant credit quality deterioration.

Implementation and Impact

These modifications apply to NCDs currently rated AA. For coupon rate adjustments, the most conservative available rating will be considered. The changes reflect Piramal Enterprises' proactive approach to debt management and transparency with its investors.

These revisions to the NCD terms demonstrate Piramal Enterprises' commitment to maintaining a balanced risk profile while offering fair terms to its debt investors. The step-up/step-down coupon rate mechanism provides a clear framework for interest rate adjustments based on the company's credit rating performance.