Mumbai: Ajay Piramal-led Piramal Healthcare Ltd has identified information technology-enabled security systems, infrastructure consulting and portfolio investment as the areas of business that it intends to enter in the future.
These sectors, unrelated to the group’s existing businesses, are in addition to insurance and infrastructure finance, that the company has been actively looking at venturing into.
Ajay Piramal. Photo: Bloomberg
The shareholders of the company have approved the special resolution to make necessary changes in the memorandum of association of the company for the entry into new businesses, Piramal Healthcare said in a filing to stock exchanges.
This enabling resolution will allow the company to enter high potential business ventures, including the financial services and infrastructure segments, said a senior executive from Piramal Healthcare on condition of anonymity.
“It may also get into a few other non-traditional businesses such as information technology, security systems and packaging etc. as and when opportunities come up,” he said. “The company may either look at direct entry in such businesses or may look at acquisition opportunities in these sectors.”
Mint’s C.H. Unnikrishnan outlines Piramal Healthcare’s possible strategies as it explores going into completely new businesses including information technology.
The company had sold its India formulation business, which was then ranked the fifth-largest in the domestic pharmaceutical market by sales, and the diagnostic services division for a total value of around Rs17,600 crore a year ago. It had then said that it will invest this money into new businesses.
Piramal Healthcare is currently engaged in three businesses, including contract manufacturing of drugs, drug research, and consumer health and hospital-based drug formulations.
Chairman Ajay Piramal had earlier said that Piramal Healthcare will look at expanding its existing businesses and also go beyond them to transform into a diversified business group.
Piramal in an earlier interview with Mint had said that infrastructure financing such as home loans and lending to corporates engaged in construction and other infrastructure businesses is one area that the company will seriously look at for investments. Mint had earlier also reported the company’s plans to enter insurance sector. Piramal had recently formed a new financial services company—Piramal Capital, a unit of Piramal Healthcare—to enter infrastructure financing.
“In the $80 billion IT services industry, it will be pitted against well-established Indian IT players like Tata Consultancy Services Ltd, Infosys Ltd, Wipro Ltd, Cognizant and HCL Technologies. Besides, it will have multinationals like IBM, Accenture and Capgemini to contend with,” said an industry expert who didn’t want to be identified.
Similarly, in the electronic security space, it will have competition from established rivals, including HCL Infosystems Ltd, Siemens Ltd, Rolta Ltd, Godrej Security Solutions and Zicom Ltd.
The demand for security equipment has gone up manifold in recent times, especially after the recent terrorist attacks in major cities, including Mumbai and New Delhi. India, according to industry estimates, will be investing $12.3 billion into the private security industry by 2016, said the industry expert quoted earlier.
Piramal Healthcare, soon after the completion of the sale to Abbott Laboratories, had formed an internal strategy group with sectoral experts to identify new investment opportunities. The company, in the interim period has also looked at some portfolio investments, including a purchase of 5.5% stake in Vodafone Group Plc, with a two-year exit option.
Piramal Healthcare’s shares rose 2.9% to Rs379.10 on BSE on Thursday, while the benchmark Sensex declined 2.3%.
Leslie D’Monte contributed to this story.