Chairman of Piramal Healthcare Ajay Piramal says funds can be raised from within
Chairman of Piramal Healthcare Ajay Piramal, talks to BT's Geetanjali Shukla. Edited excerpts:
Chairman of Piramal Healthcare Ajay Piramal
Chairman of Piramal Healthcare Ajay Piramal, talks to BT's Geetanjali Shukla. Edited excerpts:
On shareholder discontent
There are two ways we have rewarded shareholders. In addition to the dividend that we paid out for the year ending March 2011, we also had a big buyback - Rs 2,500 crore was given back to shareholders.
On why the formulations business was not demerged before being sold to Abbott
It would not have been possible. We got a valuation that was nine and a half times the topline and 30 times the EBITDA. Nobody in the world has got that for a branded generics company.Why did we get such a significant valuation? Abbott wanted a company which they could control 100 per cent. They wanted a transaction which was clean and without any liabilities,… a quick and quiet transaction. If you talk of doing a demerger, it will take a minimum of six to nine months as you need shareholder approval, court approval... The maximum that we could have given them was 52 to 53 per cent of our equity, they would have made an open offer for another 20 per cent, but they would not have in any circumstances got 100 per cent... Though the price has gone down in the long-run, we feel, this is in the better interests of the shareholders.
On allocating funds for the strategy units
It is difficult to make an allocation because it depends on the opportunity that one would get. Approximately 60 per cent will still go towards the pharma space. For the right opportunity there will be enough funds. We can raise funds from within; we can also raise funds by raising some debt. I think it is the opportunity that will determine things.
On IndUS Growth Partners
The connection is Nitin Nohria [Harvard's Dean], who has been a very close advisor to us. …Before he became the dean he was involved very closely with us. That exposed us a lot to Harvard. I have also been to Harvard. Shikhar Ghosh is my son's professor. He spoke very highly of him, Vivek Sharma has also joined this team, he is from the PE firm TH Lee. Nitin came in touch with him and suggested we look at him. We have two more younger fellows, one of whom just graduated from Harvard.
For a more detailed interview go to www.businesstoday.in/piramal
On shareholder discontent
There are two ways we have rewarded shareholders. In addition to the dividend that we paid out for the year ending March 2011, we also had a big buyback - Rs 2,500 crore was given back to shareholders.
On why the formulations business was not demerged before being sold to Abbott
It would not have been possible. We got a valuation that was nine and a half times the topline and 30 times the EBITDA. Nobody in the world has got that for a branded generics company.Why did we get such a significant valuation? Abbott wanted a company which they could control 100 per cent. They wanted a transaction which was clean and without any liabilities,… a quick and quiet transaction. If you talk of doing a demerger, it will take a minimum of six to nine months as you need shareholder approval, court approval... The maximum that we could have given them was 52 to 53 per cent of our equity, they would have made an open offer for another 20 per cent, but they would not have in any circumstances got 100 per cent... Though the price has gone down in the long-run, we feel, this is in the better interests of the shareholders.
On allocating funds for the strategy units
It is difficult to make an allocation because it depends on the opportunity that one would get. Approximately 60 per cent will still go towards the pharma space. For the right opportunity there will be enough funds. We can raise funds from within; we can also raise funds by raising some debt. I think it is the opportunity that will determine things.
On IndUS Growth Partners
The connection is Nitin Nohria [Harvard's Dean], who has been a very close advisor to us. …Before he became the dean he was involved very closely with us. That exposed us a lot to Harvard. I have also been to Harvard. Shikhar Ghosh is my son's professor. He spoke very highly of him, Vivek Sharma has also joined this team, he is from the PE firm TH Lee. Nitin came in touch with him and suggested we look at him. We have two more younger fellows, one of whom just graduated from Harvard.
For a more detailed interview go to www.businesstoday.in/piramal
