Piramal Enterprises demerger: Wrong math or a mispriced opportunity?

The demerger of Piramal Enterprises (PEL) was a long awaited one in the market. With sizable businesses in both financial services and pharmaceuticals, the demerger aroused significant interest among investors from a value creation point of view.

But the combined value of financial services and pharmaceutical businesses took considerable hit post demerger and gave a jolt to investors. In the quarter prior to demerger, promoters and institutions held 43% each in the company while FIIs held a lion’s share of 35%.

Piramal Enterprises demerger: Wrong math or a mispriced opportunity?

Just prior to the effective date of demerger, the stock or PEL was quoting at Rs.2,000 per share and at a market value of Rs.48,000 crore representing the combined the value of both the businesses.

As we write this article, PEL’s marktcap is at Rs 19,153 crore while that of the pharma stock (Piramal Pharma) is Rs 11,020 crore – totalling to Rs 30,173 crore. This is a 37% erosion post demerger. PEL is trading at Rs.802 per share while the pharmaceutical business (Piramal Pharma) is trading at Rs.92 per share.

So, what went wrong with the demerger math? We will look at this in detail by understanding where the two businesses stand now and what the future may hold for them. As  it is now close to 10 months since the demerger came into effect, the standalone businesses reveal more now to provide clarity on what’s happening and what could be in store.

Demerger, also called Spin-off is a corporate action in which the business operations of a company are segregated into one or more components. This is mainly done to run businesses separately and in a focused way if their businesses and capital requirements are different. This provides benefit of reaping the right valuation for each of these businesses while meeting their capital requirements based on their own merit. Investors can also make a choice to invest in the business they like. Demergers are also done as a part of succession planning

According to legendary investor Peter Lynch, spin-offs of divisions or parts of companies into separate, freestanding entities often result in astoundingly lucrative investment opportunities.

One of the demergers that created phenomenal wealth for shareholders in India was that of the demerger of Bajaj Auto in 2007. This resulted in the birth of Bajaj Auto, Bajaj Finance, Bajaj Finserv and Bajaj Holdings and all the companies multiplied wealth for investors.  The one in news, Adani Enterprises, was another that spun-off businesses after incubating them. 

Other demergers that created substantial wealth include Sundaram Clayton’s demerger of Wabco India, TCI group’s demerger of TCI Express, ABB’s demerger of power products business (now Hitachi energy), Tube Investment’s demerger of manufacturing business into TI India and Max group’s demerger of Max healthcare.

About PEL Demerger

PEL decided to demerge its pharmaceutical business into a separate entity named Piramal Pharma Ltd (PPL).  Under the demerger scheme, four fully paid-up equity shares of PPL of Rs 10 each were issued to PEL shareholders for one fully paid-up equity share in PEL with face value of Rs 2 each held by them. 

The demerger became effective from 30th August 2022 (ex-date) with PEL commencing trading as a pure financial services company.  PPL later got listed on 19th October 2022.  

About the Piramal Group

PEL founder, Ajay Piramal, was born in a business family that owned Morarjee Textiles Mills in Bombay, run by his father Gopikisan Piramal. In 1979, his father passed away, putting the reins on his and his brothers’ Dilip and Ashok’s shoulders. Dilip Piramal, the eldest, soon separated to run VIP Industries. The textile businesses went to Ashok Piramal group in a family split in 2005.  

The turning point for Ajay Piramal came in 1988, when he bid for MNC pharma, Nicholas Laboratories. In the next two decades, the business grew to become the third largest pharmaceutical company in India before it sold the generic business to Abbott Laboratories in a $3.7 billion deal (Rs.17,500 crore) in 2010. It included an upfront payment of $2.12 billion, with an additional $400 million annually for the next four years. After paying related taxes and doing buy-back for 1/4th of initial consideration, the remaining corpus was retained by the company. 

While this was done, Piramal group still retained other smaller parts of its pharmaceutical businesses.  Meanwhile, Ajay Piramal also acquired Gujarat Glass in 1984 and renamed Piramal Glass. This was later sold for $1 billion to PE Blackstone in December 2020.  Ajay Piramal also took an opportunistic investment call in Vodafone in 2012 for a short stint and exited with 52% returns for $1.4 billion in a matter of 2 years. 

This cash kitty gave birth to Ajay Piramal’s new innings in financial services and that grew larger with the acquisition of DHFL in September 2021. PEL also holds 10% stake in Shriram Capital, the holding company of Shriram Finance. 

The latest corporation action was the demerger of PEL into two businesses. It also seems to be a part of the succession planning of the group with Ajay Piramal’s son Anand Piramal taking the lead at PEL and Nandini Piramal taking the lead at PPL.

(On the periphery 😊 Mukesh Ambani’s daughter Isha Ambani is married to Ajay Piramal’s son Anand Piramal. Ajay Piramal also sits in the board of Tata Sons). 

What went wrong with these businesses?

#1 Piramal Enterprises (PEL)

PEL’s core lending business was mainly in financing large real estate projects (wholesale lending) until it acquired the retail home loan business of DHFL. In the first quarterly result post demerger (September 2023 quarter), PEL reported a net loss of Rs 1,536 crore mainly on account of additional provisioning.  PEL has moved Rs 5,888 crore worth of wholesale assets (large lumpy loans) from Stage 1 to Stage 2 as the management believed there could be potential stress from these assets. As a result of this asset recognition move, the company had to make significant provisions that dented its profitability.

Consequently, in the next 3 months, the stage 2 + stage 3 AUM jumped to over Rs.12,000 crore in Q3FY23 before coming down in Q4FY23 after sale to asset reconstruction (ARC) companies.

Note: According to the asset classification norms that NBFCs have to follow, Stage 1 assets consists of loans overdue for up to 30 days, stage 2 consists of loans overdue for 31-89 days, and stage 3 consists of loans overdue by more than 90 days.

The other issue that PEL had to deal with in the last one year was the increasing cost of funds after a sharp increase in interest rates. PEL’s book is half wholesale and half retail, and the retail book is the DHFL book. Cost of funds averaged 8.6% in FY23 while the yield on loans was at 12%. 

Asset quality woes, high share of wholesale book in AUM, rising cost of funds and higher reliance on bank borrowings took a toll on the stock price in the last 9 months. 

The stock fell from Rs.1,130 on the ex-date to Rs.802 now.

#2 Piramal Pharma Ltd (PPL)

The quarterly numbers post the demerger (September 2023 quarter) disappointed PPL shareholders as profitability was far below expectation. Weak financial performance combined with heavy reliance on debt took a toll on the stock price in the last 7 months. 

In the next quarter (ending December 2023), it threw another surprise by reporting higher loss. Sharp margin contraction combined with significant interest and depreciation costs hit profitability. 

Besides profitability woes, the company’s revenue at Rs.7,082 crore and EBIT of Rs.223 crore on a fixed asset base (including goodwill) of Rs.8,887 crore and capital employed of Rs.11,565 crore suggested underutilisation of capacities or problems with scaling up. This apart, PPL also had capex plans of ~Rs.1,000 crore for FY23, which added to investors worry. From Rs.200 on listing date, the stock fell to a low of Rs.64 before settling at Rs. 92 now. 

Where the two companies stand now

#1 PEL - trying to improve yield

Here’s a quick look into the key numbers at a glance the end of FY23

The year FY23 has been one of course correction and restructuring for PEL to chart its long-term growth trajectory. It focused on trimming down its wholesale book while finding out newer opportunities in the retail lending beyond housing finance acquired through DHFL. While the AUM hasn’t changed much in the last one year, the composition has undergone a big change.

Here’s a quick look into the AUM evolution in the last one year.

Source: Company presentation for Q4 & FY23

The whole sale book has been classified as Wholesale 1.0 & 2.0 with 1.0 comprising of the legacy book skewed towards lumpy real estate developer loans and 2.0 comprising of more granular book comprising real estate and mid-sized corporate loans with average ticket size of Rs. 55 crore.

Breaking down the retail book further, PEL is now focusing more on high yielding segments including unsecured loans. PEL is consciously moving its retail book towards high yielding AUM, though it carries risk, to generate higher RoA and RoE.  The change in mix has also led to retail book yields improving from 12.5% at the end of FY22 to 14.2% at the end of FY23.

Source: Company presentation for Q4 & FY23

#2 PPL – niche businesses but still struggling

Here’s a quick look into the key numbers at a glance at the end of FY23.

PPL is a differentiated pharmaceutical business with a niche business mix comprising CDMO, complex generics and OTC products. It exited its generic drug business way back in 2010. 

To explain further on business segments, CDMO is the largest business segment contributing to over half of its sales within which 5% comes from discovery services (like Syngene) while majority of the rest comes from development and manufacturing (like Divis, Suven). It has USFDA compliant facilities both in India and abroad to take up assignments closer to where its customers are. 

Further break-up of development revenue shows that 43% of revenue is from drugs in Phase-III trials which will open further opportunities for manufacturing in future if they enter commercialisation.

Source: Company presentation for Q4 & FY23

Hospital generics comprising anaesthesia products is the second major vertical contributing to a third of its revenue and this is a high entry barrier business. 

Remaining is contributed by the OTC products in India comprising brands such as Saridon, Lacto Calamine, Littles, Polycrol, Tetmosol and I-range. OTC business is in the process of scaling up with significant investment going into brand building and is yet to reach break-even.  

Here’s a break-down of segment-wise business revenue for last two quarters as well as for FY23. 

Source: Company press release

Note: Management has not given segment-wise margins. Barring the OTC business, other business segments are profitable. 

Despite being in niche businesses, the profitability took a plunge in FY23 Vs FY22. Underutilisation of capacities in the CDMO business and operating losses in OTC business seem to be hurting its performance. 

Over several years now, PPL has also done several acquisitions in US, Europe and in India and stitched them together to make CDMO a sizable one. Meanwhile PPL also received $490 million (Rs. 3,500 crore) in equity funding from PE Carlyle for a 20% stake in October 2020.

PPL has done close to Rs.1,000 crore of capex in FY23, mainly towards the expansion of its facilities in US and Europe and in Ahmedabad. 

What’s the road ahead for these businesses?

#1 PEL – less negative surprises going forward

PEL seems to have proactively taken a clean-up of its wholesale book in FY23. Since it had sold some of its assets to ARCs at an over 60% discount, there may not be any major negative surprise coming from it. 

High capital adequacy of 31% and Investments valued at Rs.6,200 crore in Shriram Group are key positives to highlight. Shriram Group Stake itself is a third of current market value.

As explained above, PEL’s ultimate objective is to achieve an AUM mix of 2/3rd retail and 1/3rd wholesale from the 50:50 mix at the end of FY23 to in turn achieve 2.5-3% RoA and mid-teen RoE. The retail book plan comprises of increasing branch count from 400 to 600 and then leveraging the network to offer products like Loan against property (LAP) and MSME loans to diversify beyond housing finance. Its unsecured book is also growing through fintech tie-ups.

All these initiatives should help it improve its yield on advances while not compromising on asset quality to achieve its RoA and RoE objectives.

In FY23, PEL’s cost of funds stood at 8.6% while its yield on AUM stood at 12% and NIMs at 5.8%. 

Let’s also try to understand from other NBFC valuations on where PEL can head on the valuation curve as it improves on various parameters. 

If PEL can achieve its objective of 2.5 – 3% RoA and mid-teens RoE, it can gradually move from 0.6 times book value to 1.5 to 2 times book value in the lines of NBFCs such as Mahindra Finance, IIFL Finance and Aditya Birla Capital (AB Capital). 

PEL is more likely to achieve key financial metrics such as RoA and RoE closer to these players while it is unlikely to achieve the superior metrics of players like Cholamandalam Investment and Finance and Bajaj Finance.  

PEL’s transformation from hereon could closely resemble the transformation achieved by AB Capital from a corporate heavy lender to retail lender over the last few years. 

In FY23, AB Capital managed 2.45% RoA and 14.76% RoE in its lending business with NIM of 6.84% on an AUM of Rs. 80,556 crore. Its cost of funds stood at 7.25%. ABFRL’s housing finance business also reported close to 2% RoA and 13% RoE in FY23 with NIM of 5% with AUM of Rs.13,800 crore. 

PEL’s destiny could also be decided by what role (if any) destiny holds for Anand Piramal in the Reliance group. 

#2 PPL – better utilisation key to profitable growth

PPL is hopeful of profitable growth in FY24 after seeing recovery on order inflows, better business mix and profitability in Q4FY23. During the year, it has successfully cleared 36 regulatory inspections including 4 US FDA audits at its overseas sites at Riverview, Lexington and Sellersville in US and Digwal in Telangana. These five sites which have passed the audit contributed more than half of the CDMO sales in FY23, which indicates less hurdles to future growth. 

PPL has also announced a rights issue of Rs.1,050 crore to keep its debt under check while funding its capital expansion plans. It has filed necessary papers with SEBI for approval and is expecting to complete the issue in the first half of FY24. 

For PPL, the key challenge going forward will be to scale up utilisation of capacities, deliver on operating performance, bring down debt and showcase a clear path to profitable growth. 

As mentioned earlier, PPL is challenged with underutilisation of capacities and problems with scaling up.  The early signs of revival should come from accelerated sales growth (especially in its CDMO business) combined with strong margin performance (20%+) to take RoCE back to double digits on this bloated capital base.   But this is not an easy task to achieve, especially to deserve the valuation that the market affords for niche companies in this space.

For now, the only compelling part is its compliance track record in its CDMO business that keeps the hopes alive.  

In general, Q1 is not a strong for CDMO business after a strong Q4 and so upcoming Q1 may not give clear indications of recovery. It may have to be seen in subsequent quarters.

For investors, the one important factor in favour is the strong hand of promoter in both these businesses. The challenges appear to be similar for both – to deliver on financial performance with visible improvement in each quarter, leading to a gradual re-rating in valuation. A group to be watched!

The securities quoted are for illustration purposes only and are not recommendatory.

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This service is not directed for access or use by anyone in a country, especially the USA, Canada or the European Union countries, where such use or access is unlawful or which may subject PrimeInvestor Financial Research Pvt Ltd or its affiliates to any registration or licensing requirement.

The Research Service, including recommendations, research reports, updates, and other information will be accessible through the RA’s website https://primeinvestor.in only. Such recommendations and updates will not be provided over phone calls.

Fees: Our current fee structure, the term and duration of our subscription for our Research Service, can be viewed on our website: https://primeinvestor.in/prime-pricing. Eligibility for any discounts is ascertained at the time the client subscribes. Any such discount and its tenure shall be at the discretion of the RA.

Subscription and access to content services fall under the purview of Goods and Services Tax (GST) as per the current indirect taxation policy, Government of India. Unless otherwise indicated, prices stated on our website are exclusive of applicable GST, any applicable value added tax (VAT) or other sales taxes. We are a business-to-consumer (B2C) service provider and we do not commit to provide any input tax credit on GST charged on subscription to our Research Service.

We may change the Subscription Fees and charges then in effect, or add new fees or charges which will take effect at the end of the client’s subscription period, by giving notice in advance and an opportunity to cancel renewal of the subscription.

Subscription Access & Renewal: Subscription to the Website commences immediately on the realisation of payment of the Subscription Fees. Subscriptions are set to be renewed automatically at the end of the subscription period.

Unless the client notifies us before the end of his/her subscription period, or the client cancels the auto-renewal mandate within the period specified by law, that the client does not wish to renew his/her subscription, the client’s subscription will renew for the period defined by the client’s subscription plan. We will charge the subscription using the same payment method that you previously used.

Although the client may notify to us his/her intention to his/her subscription, such notice will only take effect at the end of his/her then current subscription period, and he/she will not receive a refund other than as set out under Clause 8 in these Terms.

The client may notify us of his/her wish to cancel his/her subscription by sending an email to [email protected]. The client must provide at least 5 business days advance notice for this to be implemented.

Refunds: There can be no cancellation and refund of subscription fee paid once the subscription is active, other than as stated in Clause 8 of these Terms. If the client is entitled to a refund as specified under Clause 8 of these Terms, the RA will credit that refund to the card or other payment method used by the client to submit payment, unless it has expired - in which case the RA will contact the client to proceed with the refund. If we do issue a refund or credit due to circumstances outside the obligations specified under Clause 8, we are under no obligation to issue the same or a similar refund in the future.

General disclaimers: The recommendations made herein in the Research Services are expression of views and/or opinions and should not be deemed or construed to be advice for the purpose of purchase or sale of any security, nor a solicitation or offering on any investment/ trading opportunity on behalf of the company, AMC, insurance company, or issuer of security referred to herein.

The content and research reports generated by the RA does not constitute or is not intended to constitute an offer to buy or sell, or a solicitation to an offer to buy or sell financial products, units or securities.

The information/ opinion/ views mentioned in research reports or by the RA are not meant to serve as a professional guide to the client or recipients of this Report. The research report, recommendation, or any other content published by the RA do not assure or guarantee any minimum or fixed returns to the client or recipients of the reports/ recommendations/ content.

Use of this information is at the client’s own risk. The client must make his/ her own investment decisions based on his/her specific investment objective and financial position and using such independent advisors as he/she believes necessary. The services rendered by the RA are on a best-effort basis. All information in the content or research report of the RA is provided on an as is basis. Information is believed to be reliable but the RA does not warrant its completeness or accuracy and expressly disclaim all warranties and conditions of any kind, whether express or implied.

While due care has been taken to ensure that the disclosures, information, and opinions given are fair and reasonable, PrimeInvestor Financial Research Pvt Ltd and/or none of its officers, directors, partners, employees, agents, subsidiaries, affiliates or business associates shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way whatsoever from the information/ opinions/ views contained in the research report and recommendations that form part of the Research Service, and/or mails, social media or notifications issued by PrimeInvestor Financial Research Pvt Ltd or any other agency appointed/authorised by PrimeInvestor Financial Research Pvt Ltd. Returns and performance figures mentioned in the research report represent past performance and should not be constituted to be future returns or guaranteed returns.

Any agreements, transactions or other arrangements made between the client and any third party named on (or linked to from) the Website are at your own responsibility and entered into at your own risk. Any information that you receive via the Website, whether or not it is classified as “real time”, may have stopped being current by the time it reaches you. Market price information may be rounded up/down and therefore may not be entirely accurate.

The purpose of these disclosures is to provide essential information about the Research Services in a manner to assist and enable the prospective client/client in making an informed decision for engaging in Research Services before onboarding.

History, present business and background: PrimeInvestor Financial Research Private Limited is registered with SEBI as Research Analyst with registration no. INH200008653. The Research Analyst got its registration on August 19, 2021 and is engaged in offering research and recommendation services.

Disciplinary history: There are no pending material litigations or legal proceedings against the Research Analyst. As on date, no penalties / directions have been issued by SEBI under the SEBI Act or Regulations made thereunder against the Research Analyst relating to Research Analyst services.

Details of the RA's associates: No associates.

Usage of Website Content: This Website is controlled and operated by the RA. All material, including research reports, recommendations, portfolios, ratings, lists of financial products, illustrations, statements, opinions, views, photographs, products, images, artwork, designs, text, graphics, logos, button icons, images, audio and video clips and software (collectively, “Content”) are protected by copyrights, trademarks and other intellectual property rights that are owned and controlled by the RA or by other parties that have licensed their material to us.

Except where otherwise agreed in writing with the RA, material on the Website is solely for the client’s personal, non-commercial use. Except as provided below, the client must not copy, reproduce, republish, upload, post, transmit or distribute such material in any way, including by e-mail or other electronic means and whether directly or indirectly and the client must not assist any other person to do so.

Without the prior written consent of the RA, modification of the materials, use of the materials on any other web site or networked computer environment or use of the materials for any purpose other than personal, non-commercial use is a violation of the copyrights, trademarks and other proprietary rights, and is prohibited. Any use for which the client receives any remuneration, whether in money or otherwise, is a commercial use for the purposes of these Terms.

The client may occasionally distribute a copy of a research report, or a portion of the same, from the Website in non-electronic form to a few individuals without charge, provided the client includes all copyright and other proprietary rights notices in the same form in which the notices appear, original source attribution, and the phrase “Used with permission from PrimeInvestor Financial Research Pvt. Ltd.”

While the client may occasionally download and store research reports or information from the Website for his/her personal use, he/she may not otherwise provide others with access to the same. The foregoing does not apply to any sharing functionality we provide through the Website that expressly allows the client to share Content or links to Content with others. In addition, the client may not use Content he/she has downloaded for personal use to develop or operate an automated trading system or for data or text mining.

The client agrees not to rearrange or modify the Content available through the Website. The client agrees not to display, post, frame, or scrape the Content for use on another website, app, blog, product or service, except as otherwise expressly permitted by these Terms. You agree not to create any derivative work based on or containing the research products and Content. The framing or scraping of or in-line linking to the Services or any Content contained thereon and/or the use of webcrawler, spidering or other automated means to access, copy, index, process and/or store any Content made available on or through the Services other than as expressly authorized by us is prohibited.

The client further agrees to abide by exclusionary protocols (e.g., Robots.txt, Automated Content Access Protocol (ACAP), etc.) that may be used in connection with the Research Services. The client may not access parts of the Research Services to which he/she is not authorized, or attempt to circumvent any restrictions imposed on your use or access of the Services.

As a general rule, the client may not use the Content, including without limitation, any Content made available through one of our RSS Feeds, in any commercial product or service, without our express written consent.

The client may not create apps, extensions, or other products and services that use our Content without our permission. The client may not aggregate or otherwise use our Content in a manner that could reasonably serve as a substitute for a subscription to the Website.

The client may not access or view the Services with the use of any scripts, extensions, or programs that alter the way the Services are displayed, rendered, or transmitted to you without our written consent.

The client agrees not to use the Services for any unlawful purpose. We reserve the right to terminate or restrict the client's access to the Website if, in our opinion, the client's use of the Services may violate any laws, regulations or rulings, infringe upon another person's rights or violate these Terms.

Prohibited content: The Website includes comments sections, blogs and other interactive features that allow interaction among clients and between clients and the RA. We call the information posted by or contributed by users “Contributed Content.” In the course of availing of the Research Services or uploading any post or comment on the Website, the client shall not post any Contributed Content that (i) contains nude, semi-nude, sexually suggestive photos, (ii) tends or is likely to abuse, harass, threaten, impersonate or intimidate other users of the Website and/or Research Services, (iii) is lascivious or appeals to the prurient interest or if its effect is such as to tend to deprave and corrupt persons who are likely to use or have access to the Website and/or Services, or (iv) otherwise violates, is prohibited or restricted by applicable law, rule or regulation, is offensive or illegal or violates the rights of, harms or threatens the safety of other users of the Website and/or Services (collectively “Prohibited Content”).

We reserve the right to cease to provide the client with the Research Services or access to the Website, or terminate your subscription, with immediate effect and without notice and liability, for violating these Terms, applicable law, rules or regulations and reserves the right to remove Prohibited Content which is in violation of these Terms, or is otherwise abusive, illegal or disruptive. The determination of whether any content constitutes Prohibited Content, violates these Terms, or is otherwise abusive illegal or disruptive, is subject to the sole determination of the Firm.

Changes to Research Services: We are constantly endeavouring to improve the quality of Research Services provided to our clients. Due to this, the form and nature of the Research Services provided may change from time to time without any prior notice to the client. We reserve the right to introduce and initiate new features, functionalities, components to the Website and/or Research Services and/or change, alter, modify, or discontinue existing ones without any prior notice to the client.

Warranty and liability disclaimer: The Website, Research Services, and all the materials and services, included on or otherwise made available to the client through this Website is provided by the RA on an “as is” and “as available” basis without any representation or warranties, express or implied except otherwise specified in writing. Without prejudice to the foregoing paragraph, the RA does not warrant that:

  • This Website and/or Research Services will be constantly available, or available at all;
  • The information on this Website or provided through the Research Services is complete, true, accurate or not misleading; or
  • The quality of any products, services, information, or other material that you obtain through the Website or Services will meet your expectations.

The RA, to the fullest extent permitted by law, disclaims all warranties, whether express or implied, including the warranty of merchantability, fitness for particular purpose and non-infringement. The RA makes no warranties about the accuracy, reliability, completeness, or timeliness of the Website, Research Services, Content, Contributed Content, Services, software, text, graphics and links.

The RA does not warrant that this Website, Research Services, information, content, materials, or any other material included on or otherwise made available to you through this Website, their servers, or electronic communication sent by the RA are free of viruses or other harmful components.

Nothing on this Website constitutes, or is meant to constitute, advice of any kind.

Indemnification: The client:

  1. Represents, warrants and covenants that no materials of any kind provided by him/her will:
    1. Violate, plagiarise, or infringe upon the rights of any third party, including copyright, trademark, privacy or other personal or proprietary rights; or
    2. Contain libellous, Prohibited Content or other unlawful material;
  2. Hereby agree to indemnify, defend and hold harmless the RA and all of the RA’s officers, directors, owners, agents, customers/clients, information providers, affiliates, licensors and licensees (collectively, the “Indemnified Parties”) from and against any and all liability and costs, including, without limitation, reasonable advocate’s fees, incurred by the Indemnified Parties in connection with any claim arising out of any breach by the client of these Terms or the foregoing representations, warranties and covenants. The client shall cooperate as fully as reasonably required in the defence of any such claim. The RA reserves the right, at its own expense, to assume the exclusive defence and control of any matter subject to indemnification by the client.

Applicable law: This Website, including the Content and Contributed Content and information contained herein, and the provision of Research Services shall be governed by the Securities and Exchange Board of India, laws of the Republic of India and the courts of Chennai, India which shall retain exclusive jurisdiction to entertain any proceedings in relation to any disputes arising out of the same. As such, the laws of India shall govern any transaction completed using this Website.

Information gathered and tracked: Information submitted or collected on the Website or pursuant to the use of the Services is stored in a database. Specifically, we store the username, name, e-mail address, contact number, as submitted or collected on our Website or through the provision of the Research Services. We may use such information to send out occasional promotional materials, including alerts on new Services available, or other promotional and marketing material relating to our clients and customers.

In accordance with the Information Technology Act 2000, the name and the details of the Grievance Officer at PrimeInvestor is provided below:

Mr. Srikanth Meenakshi
PrimeInvestor Financial Research Pvt. Ltd., Registered office: 659, 4th Avenue, D-Sector, Anna Nagar Western Extension, Chennai 600 101.
Email: [email protected]

11. Mandatory notice:

Clients shall be requested to go through Do’s and Don’ts while dealing with RA as specified in SEBI master circular no. SEBI/HO/MIRSD-POD-1/P/CIR/2024/49 dated May 21, 2024 or as may be specified by SEBI from time to time.

12. Optional Centralised Fee Collection Mechanism:

SEBI has operationalized a centralized fee collection mechanism for IA and RA. Under this mechanism, clients shall pay fees to IAs/RAs through a designated platform/portal administered by a recognized Administration and Supervision body. This is an optional mechanism for the registered entities. At this time, PrimeInvestor has opted out of this fee collection mechanism. Therefore, all subscription payments for the Research Services will be through the modes as specified in Clause 5 of these Terms.

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