Ashok Piramal Group looking to expand

Mumbai: The Ashok Piramal Group, which has business interests in textiles, real estate, engineering, entertainment and sports, is looking at expansion. The three sons of Ashok Piramal—Rajeev Piramal, vice-chairman, Peninsula Land Ltd, Harsh Piramal, vice-chairman, Morarjee Textiles Ltd, and Nandan Piramal, vice-chairman, Jammin Entertainment—said in an interview that the group is looking to invest Rs2,500-3,000 crore to just buy land and also diversify into new businesses. Edited excerpts:

You had to put some of your expansion plans on hold, especially the hospitality venture. Are things back on track on that?

Rajeev Piramal: Hospitality is still on the back-burner. Our focus right now is to get our existing (construction) projects out of the way and then looking at a whole spate of new projects. So we have a number of new acquisitions that we are working on.

We are one of the few real estate companies that still have a healthy balance sheet. We are not leveraged heavily and we have cash available, etc. So our focus is to get our existing projects out and completed where we pre-sold most of our space, and then to really expand and ramp up our presence as well. So we are looking at putting in Rs2,500-3,000 crore towards land acquisition alone in the next 18-24 months. And that is our target right now.

You have got board approval to raise about Rs750 crore. Don’t you require more money?

Rajeev Piramal: There are always more deals you could do. I think the deal flow is very robust and there is a huge amount of opportunity out there. But it is a question of managing bandwidth and growth... So I think of acquisitions where we would be partly funded by realizations from existing business.

So the qualified institutional placement (QIP) route is more likely?

Rajeev Piramal: We do have the approval for the QIP. We don’t feel it is the right time for us to do the QIP simply because we don’t feel that the value of the company is commensurate to what we feel it should be. So that option is available to us but we have very robust cash flows from our existing businesses alone.

A chunk of the Rs2,500-3,000 crore would come from our existing business and from the sale of our existing properties.

Nandan Piramal: We are talking about a few things. We are in the process of looking at a couple of businesses that we feel are good and this is the right time to get into it. I don’t want to talk about it too much right now.

What space would these businesses be in?

Nandan Piramal: Not in textile or real estate but a completely new business. We are looking at various other spaces as well. So media could be one option that we are looking at. We are in the early stages of evaluating right now.

On textiles, is a recovery beginning to take shape?

Harsh Piramal: I am feeling quite confident now for two reasons. One is internally for Morarjee itself, and the reason is that the export market has started to pick up. Second is that the Indian market has bounced back very fast and consumer spending has bounced back pretty fast and much faster than the rest of the world or Europe, for example, which is our primary export market. We have shifted a lot of our base and selling to the Indian market, where we have got a much more balanced market share between India and the rest of the world. Earlier, we were much more skewed toward exports.

So, for these two reasons I am confident about the textiles business and I am confident that in the next financial year we will be a profitable business once again.

cnbctv18@livemint.com