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If we get the right value for Shriram, we may exit it: Ajay Piramal

if-we-get-the-right-value-for-shriram-we-may-exit-it-ajay-piramal

Exiting Shriram is one of the options that we have because the only raw material for a financial services business is cash and if we were to invest, it would be in that business. We keep evaluating options to make sure that the quality of assets that we acquire are good and are available at a price which would make sense for the shareholders, said Ajay Piramal, Chairman Piramal Group, in an interview with ETNOW.

Edited excerpts:

ET Now: How has Piramal Group fared last year

Ajay Piramal: Overall, the company has grown 24 per cent in the year. Our turnover this year has been Rs 13,200-crore odd which was a 24 per cent growth over last year. Our profits have also grown 25 per cent and our normalised profits this year are at Rs 1,936 crore. For the financial services business, we have grown assets under management (AUM) by 34 per cent while the revenue from the financial services is up 40 per cent for the same period of last year.

As far as the pharma is concerned, global pharma has grown 11 per cent and our margins have also increased 21 per cent. Overall, it has been a good year for growth both in the financial services as well as in the pharma sector.

ET Now: The financial services arm contributes roughly 53 per cent to your sales. What kind of investments should we expect in financial services business going forward? Also, what about your realty business?

Ajay Piramal: As far as our lending to real estate sector is concerned, at the beginning of the year, we had said we wanted to diversify and bring down our exposure to the real estate sector. That is exactly what we have done.

At the beginning of the year, 83 per cent of our funding was to the real estate; now that has come down to 63 per cent and housing finance which we had only introduced 18 months ago, now stands in excess of Rs 5,000 crore.

ET Now: At this point, what is the valuable strategic option for Piramal Enterprises when it comes to inorganic growth opportunities — something that will create value for your shareholders?

Ajay Piramal: We are very clear that there are lots of options today in the space of financial services. Post the liquidity crisis at the end of September last year, a lot of NBFCs have come under stress. There have been a lot of portfolios which are available too. We have been one of those companies which has emerged stronger after all this crisis because of the strong track record that we have had.

We have been able to attract good credit providers. We keep evaluating options as we need to make sure that the quality of assets that we acquire are good and are available at a price which would ultimately make sense for the shareholders.

We will look at the quality of assets as well as the value that we have to pay for it. If it makes sense, we would do it.

ET Now: Would DHFL be a good option?

Ajay Piramal: We would look at portfolios of DHFL and the same criteria would apply.

ET Now: We understand you are looking to exit from the Shriram Group. Mr Thyagrajan said that you are considering exit options perhaps to deploy the money in your realty business. What really is the trigger and how soon could it happen?

Ajay Piramal: We are looking at various options for creating maximum value for the shareholders of both Piramal as well as Shriram groups and one of those options is the plan to exRead More – Source

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Markets

If we get the right value for Shriram, we may exit it: Ajay Piramal

if-we-get-the-right-value-for-shriram-we-may-exit-it-ajay-piramal

Exiting Shriram is one of the options that we have because the only raw material for a financial services business is cash and if we were to invest, it would be in that business. We keep evaluating options to make sure that the quality of assets that we acquire are good and are available at a price which would make sense for the shareholders, said Ajay Piramal, Chairman Piramal Group, in an interview with ETNOW.

Edited excerpts:

ET Now: How has Piramal Group fared last year

Ajay Piramal: Overall, the company has grown 24 per cent in the year. Our turnover this year has been Rs 13,200-crore odd which was a 24 per cent growth over last year. Our profits have also grown 25 per cent and our normalised profits this year are at Rs 1,936 crore. For the financial services business, we have grown assets under management (AUM) by 34 per cent while the revenue from the financial services is up 40 per cent for the same period of last year.

As far as the pharma is concerned, global pharma has grown 11 per cent and our margins have also increased 21 per cent. Overall, it has been a good year for growth both in the financial services as well as in the pharma sector.

ET Now: The financial services arm contributes roughly 53 per cent to your sales. What kind of investments should we expect in financial services business going forward? Also, what about your realty business?

Ajay Piramal: As far as our lending to real estate sector is concerned, at the beginning of the year, we had said we wanted to diversify and bring down our exposure to the real estate sector. That is exactly what we have done.

At the beginning of the year, 83 per cent of our funding was to the real estate; now that has come down to 63 per cent and housing finance which we had only introduced 18 months ago, now stands in excess of Rs 5,000 crore.

ET Now: At this point, what is the valuable strategic option for Piramal Enterprises when it comes to inorganic growth opportunities — something that will create value for your shareholders?

Ajay Piramal: We are very clear that there are lots of options today in the space of financial services. Post the liquidity crisis at the end of September last year, a lot of NBFCs have come under stress. There have been a lot of portfolios which are available too. We have been one of those companies which has emerged stronger after all this crisis because of the strong track record that we have had.

We have been able to attract good credit providers. We keep evaluating options as we need to make sure that the quality of assets that we acquire are good and are available at a price which would ultimately make sense for the shareholders.

We will look at the quality of assets as well as the value that we have to pay for it. If it makes sense, we would do it.

ET Now: Would DHFL be a good option?

Ajay Piramal: We would look at portfolios of DHFL and the same criteria would apply.

ET Now: We understand you are looking to exit from the Shriram Group. Mr Thyagrajan said that you are considering exit options perhaps to deploy the money in your realty business. What really is the trigger and how soon could it happen?

Ajay Piramal: We are looking at various options for creating maximum value for the shareholders of both Piramal as well as Shriram groups and one of those options is the plan to exRead More – Source

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