One of India Inc’s leading voices, billionaire Ajay Piramal now feels more optimistic about India’s future than he was last year, when the covid-19 pandemic first hit the country
One of India Inc’s leading voices, billionaire Ajay Piramal now feels more optimistic about India’s future than he was last year, when the covid-19 pandemic first hit the country.
In a fire-side chat with Rajat Gupta, senior partner, McKinsey & Company, at the Mint India Investment Summit 2021 on Wednesday, Piramal said the Reserve Bank of India has managed the economy very well over the last 12 months, “and if we continue on that path, we will be in a stronger position." Piramal said India’s strong forex position, low current account deficit, strength to attract foreign investments and robust tax collections make him more optimistic about the future than he was last year.
Piramal, however, expressed concerns on how the second wave of the coronavirus pandemic has hit the country, adding it is important that more and more people get vaccinated.
“This time, it is much more a rural phenomenon as compared to last time and a lot of rural India has been affected. People in many places have vaccine hesitancy. That needs to be addressed," he said.
For corporate India, “liquidity is king", said Piramal, adding given enough liquidity and strength, this is the right time for companies to do both acquisitions and organic growth better. Piramal said this principle allowed him to sell his stake in one of his assets last fiscal year, and use the proceeds to make four acquisitions.
In January 2020, Piramal Enterprises sold its healthcare insights and analytics business, Decision Resources Group, to NYSE-listed Clarivate Analytics Plc., for $950 million. Also, last fiscal, Piramal Pharma Ltd (PPL), a subsidiary of Piramal Enterprises, sold 20% stake in the firm for ₹3,523.40 crores to The Carlyle Group Inc.
“So, this is the combination —Exiting where you get full value and then investing in something which we believe has a greater potential in future. With this transaction, we realized that through this sort of liquidity and strength, we can do acquisitions," said Piramal.
In June 2020, Piramal Enterprises Ltd’s pharma solutions acquired G&W Laboratories Inc.’s solid oral dosage drug product manufacturing facility in the US for over ₹130 crore; in October 2020, PPL acquired Navin Fluorine International Ltd, a manufacturer of specialty fluorochemicals for ₹65.10 crore; and in March 2021, it acquired Hemmo Pharma, manufacturers of peptide APIs for ₹775 crore. Also, RBI last month cleared Piramal Group’s insolvency resolution to acquire bankrupt mortgage financier Dewan Housing Finance Corp. Ltd (DHFL).