Mumbai: Ajay Piramal talks about his investment plans in an interview. Edited excerpts:
Is the second investment in Vodafone an indication that your long-term plans are yet to be finalised?
No. Our long-term plans are ready but we can’t say when the opportunities will arise. This (Vodafone investment) is only interim. Today the net worth of the company is Rs11,500 crore. We will get another Rs6,000 crore from Abbott by 2014 in equal annual instalments. So we need to look at opportunities to invest in the short term. In the long term, we will invest in pharmaceuticals, where we can see some activity in the US or Europe in the next six months. Secondly, we will invest in a whole spectrum of financial services, and thirdly in homeland security and defence.
Eyeing growth: Piramal Healthcare CMD Ajay Piramal says the firm needs to look at opportunities to invest in the short term. Photo by Saanskrut Kumar/Mint
The telecom sector faces uncertainty. How realistic is your expectation?
I think it’s realistic. Competition will reduce due to consolidation and tariffs will rise.
Why are you looking at security services and systems?
Given the problems we face with our neighbouring countries, and the fact that the government is opening up the defence sector, there is a need for reputed companies to supply products and services. Our reputation is in terms of manufacturing. All these are emerging areas. So if you have the ability to attract good talent and partners, it’s just about leveraging your manufacturing expertise. We will talk about these opportunies when they arise. For expertise and technology, we may look at inorganic opportunities.
What about retail home finance?
If there is a good acquisition, we can do it immediately. Otherwise I don’t see it happening for the next two years.
Is there a time frame for these long-term plans?
We’ve started the non-banking financial company and are disbursing loans. In November, we had an exposure of Rs130 crore. By December end it would have touched Rs600 crore. We will now scale it up. We have our Indiareit Funds Advisors Pvt. Ltd (realty investment fund), which is in early equity. I look at this Vodafone investment also as a financial services product and in that sense we have a reasonable exposure. We have a team in place and are building our systems and processes to continue.