BackAjay Piramal | Keeping the faith
The chairman of the Piramal Group on going by instinct and the belief in a superior force
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“I got thrown out with my bag and baggage in a week from Piramal House", yells the headline on the front page of a local newspaper. It’s a complete attention grabber, not just because model-turned-actor Arjun Rampal makes this tabloid-worthy revelation, but because it’s less than an hour before I actually have to be at Piramal House in Worli, Mumbai.
On the top floor of the 10-storey building that houses various family members, Ajay Piramal is initially surprised when I show him the newspaper; he then bursts out laughing. “It is interesting, thank you," he says. I ask him if it’s plausible that the actor was thrown out for consuming meat in the house. Yes, he says.
At the time, around two decades ago, the building was a different structure, he clarifies, and allowed for paying guests. Piramal emphasizes what the newspaper article also says, that actor Amitabh Bachchan too stayed there during his formative days as an actor. As for the vegetarianism, Piramal’s kitchen is still completely vegetarian but some of the other floors may not be.
The 57-year-old chairman of Piramal Group is seated in the corner of a large living room which has two distinct seating areas. We are in what appears to be the more informal section, but that casualness is challenged by the series of intimidating paintings on the walls by V.S. Gaitonde, M.F. Husain, S.H. Raza and F.N. Souza. Piramal admits to being a fan of the Modernists but not much of contemporary artists, whom he does not understand.
The deal (the company was later renamed Piramal Enterprises) left Ajay Piramal sitting on an enviable amount of money (about ₹ 12,000 crore after deductions) and the question of what he would do with it. The answers have already come in small chunks.
In February 2012, Piramal doubled their shareholding in Vodafone India Ltd with an additional 5.5% stake (for ₹ 3,007 crore). In mid-2012, Piramal Enterprises acquired the rights for molecular imaging development by Bayer Pharma AG, to be used for the early prediction of Alzheimer’s disease. About a month later, the company acquired Decision Resources Group (DRG), a US-based company which provides data for the global healthcare industry, for $635 million. This is besides the company’s interests in financial services (Piramal Capital) that includes a real estate equity funding arm (Indiareit), real estate (Piramal Realty has over 20 million sq. ft in Mumbai for medium-to high-end residential development), and an old steadfast glass manufacturing company, among others.
“The future would be to invest in drug discovery. That is one of the areas we are going into," he explains.
If acquisitions and diversification seem to be the chosen path for Piramal, the lessons came in early from his father Gopikrishna. “In retrospect," he says, “that’s how we have always grown. We took a new path always through acquisitions. That’s the best way." In the last decade or so, Piramal has executed some 30 mergers and acquisitions.
Piramal started working at 22 immediately after he completed his MBA from the Jamnalal Bajaj Institute of Management Studies in 1977. He got into the family’s existing textile business but the very next year, his father acquired a cutting tools factory. “He believed you have to give responsibility and accountability early, unlike many other parents. I was eight-nine months in business and independently running a company. My father always felt we had to diversify beyond textile because it’s not a long-term sustainable business. He wanted to stabilize that, so in 1972 itself he had acquired VIP and two-three other companies."
But over the next few years, Piramal was severely tested. His father died in 1979. “It was not expected; it happened within 2 minutes. I was very close to him, and his favourite."
“That was a challenging time and people were not sure what sort of leadership I would provide. I was still young; nobody had seen me really," says Piramal.
If a sign was needed of Piramal’s leadership, it came with the acquisition of Gujarat Glass, one month before Ashok died. “At that time, there was no strategic plan. It seemed like a good business. The valuation looked right. There were some problems in it which we thought we could turn around," says Piramal.
But the turning point, his most significant achievement, was the acquisition of Nicholas Laboratories Ltd in 1987 at the age of 32; it later grew as Nicholas Piramal. “There were lots of other people, bigger groups, interested in acquiring the company," says Piramal. “The pricing, in those days, was fixed by the government but the companies were willing to pay over the fixed price. I had access only to my enthusiasm. The chap (owner) was an old Englishman. He took a liking to me. Sometimes, when you are young and innocent people want to encourage you."
If the shift from glass to pharmaceuticals does not sound quite like a logical progression, it was never meant to be. “I say this often: We can give 1,000 strategic reasons why we did it. If I had hired any of the world’s best consulting firms, no one would have said go to pharma. There is a huge difference between the two. But what we have done has always been contrarian, not for the sake of being so, but because what everybody else does is not necessarily correct," says Piramal.
Through all this, he says, it’s faith that has seen him through. “I am blessed; it’s not something I have done. I have deep faith. I genuinely believe there is some other power that takes you through. I don’t think of what’s happened in the past, I don’t miss any world, what’s gone is gone. For instance, I don’t miss the domestic formulation business which was my identity for over 20 years. Somebody will look after you. Additionally, in such times, my wife Swati has been supportive and confident that I could do it."
His daughter Nandini now handles the company’s human resource issues and over-the-counter business of Piramal Enterprises while son Anand is the executive director of Piramal Realty. Ajay Piramal devotes more time now, he says, to their CSR (corporate social responsibility) activities in education and in learning the scriptures. “I believe in Hindu faith. I read the Gita often, and attend a weekly class. I try to be equanimous during good and bad times, not to dwell in the past, for, the present determines the future. The Gita has taught me humility. If I think I know everything, then I am doomed. There is a deep faith that ultimately the lord will carry you through, so why worry?"
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