It is now increasingly clear that Malvinder Singh will be using the Rs10,000 crore that he has collected from the sale of his family’s stake in Ranbaxy to fund new businesses. He told Mint that one option is to use his group’s financial services arm to enter into banking. Private equity (PE) could be one more option for him.
Singh has a few role models to look at. Atul Choksey sold his 9.5% stake in Asian Paints in 1997, for Rs128 crore. Singh’s own uncle, Analjit Singh, cashed in his investment in the Mumbai telecom market in 1998, for Rs561 crore. Both used the windfalls to operate like PE investors, seeding a host of new businesses in financial services and health care.
And then there is the more aggressive methods used by C. Sivasankaran, who has rolled money into and out of various businesses at a fast pace.
The transition from being the manager of a focused firm to being a PE investor who has his money spread across various firms can be a tough one. That is Malvinder Singh’s challenge.