Vodafone stake yields Piramal a
mega payday - Rs 8,900-crore deal gives him 52% return in 2 years
Ajay Piramal, known as India’s original
takeover tycoon for building his pharmaceuticals empire on a modest textile
inheritance through a series of acquisitions, is fast becoming one of India’s
savviest investors. On Thursday, Piramal sold his 11 per cent stake in Vodafone
India, reaping a windfall of 52 per cent return in just two years.
The Piramal group flagship
Piramal Enterprises sold the stake comprising 45.4 million shares of Vodafone
India for Rs 8,900 crore to Prime Metal, an indirect subsidiary of Vodafone.
Piramal had picked up the 11 per cent stake in two tranches during FY12, paying
a total of Rs 5,864 crore or Rs 1,290 per share. Thursday’s deal values the
shares of Vodafone India at Rs 1,960 apiece, valuing the telecom firm at $13.45
billion (Rs 81,130.35 crore).
“The equity purchase in Vodafone
was consistent with our objective of making investments that offer opportunity
to generate attractive long-term return on equity,” said Piramal, chairman of
Piramal group. “I am glad to say that we have delivered against our targeted
returns with this investment.”
Piramal earned a pile of cash after selling his domestic
generics business to Abbott Labs in 2010 for Rs 18,000 crore. In the last three
years, he has invested in a slew of other businesses, including information
management systems, real estate, road building, truck financing and renewable
energy.
In each of these new businesses, the group has been able to
profitably fill an area where there was no competition. For instance, its
financial services arm caters to businesses that have real assets but need
capital to grow. The pharmaceutical and life sciences businesses, on the other
hand, have invested in areas that will be big in the future such as molecular
imaging for early detection of diseases.
The deal with Piramal is part of Vodafone’s plan to take 100
per cent ownership of its Indian operations, following the relaxation in
foreign investment norms in the telecom sector where the foreign direct
investment ceiling was raised from 74 per cent to 100 per cent. Max India chief
Analjit Singh was the other minority shareholder in Vodafone India, who has
already sold his stake.
http://www.business-standard.com/article/companies/vodafone-stake-yields-piramal-a-mega-payday-114041001015_1.html
