April 15, 2014
-- Piramal Enterprises announced on Thursday that it has agreed to divest its entire equity stake, comprising 45,425,328 shares (around 11%), in Vodafone India to Prime Metals, an indirect subsidiary of Vodafone Group Plc, for a total consideration of Rs 8,900 crore. The deal values Vodafone India at Rs 1,960 per share. It marks another milestone in the transformation of Ajay G. Piramal from a healthcare czar to one of India’s largest financiers says Sachin Karpe. The deal leaves Piramal with a substantial cash chest at a time when capital market activity is drying up. Vodafone Group received approval from the cabinet to buy out minority shareholders in its Indian unit. The transaction is expected to close this week after which the group will fully own the Indian arm.
Over the past two decades, Piramal Group transformed itself into one of India’s top 5 pharmaceutical companies as of 2010. Piramal has consistently focused on growth and today is ranked amongst the leading business conglomerates in India. Piramal has built solid global partnerships to augment our presence in certain markets and continue to focus on core businesses by consistently investing in them says Sachin Karpe. Piramal Group plans to invest in three sectors where it has a presence—financial services, information management and healthcare. According to Piramal, financial services and information management are also sunrise sectors besides pharmaceuticals. The group’s new focus areas include realty funding, lending and structured equity investments in infrastructure and education on the financial services and realty side and drug discovery research, hospital-based products and consumer health management on the pharma front.
Piramal Enterprises had consolidated revenue around Rs.3,900 crore in 2012-13. Piramal is modest about the deal-making abilities and says that his group has made many mistakes but has definitely learned from them. The underlying philosophy of our investments is creating long-term value for our shareholders. Ajay Piramal has always set new benchmarks for family businesses in the country. According to Mr. Piramal, the equity purchase in Vodafone was consistent with the objective of making investments that offer opportunity to generate attractive long-term return on equity. From the beginning, they had said that they have a medium term view on the investment says Sachin Karpe. Vodafone, which entered India in 2007 by buying Hutchison Whampoa's (0013.HK) local cellular assets in a $11 billion deal, directly and indirectly owns a combined 84.5 percent of Vodafone India, the country's No.2 telecoms company by users and revenue.