The cash-rich Piramal Healthcare, which has recently invested part of its kitty in telecom and financial services, is now looking at a host of new sectors like security, infrastructure and information technology. In a filing to the exchanges, Ajay Piramal-led firm has said that it is looking to invest across seven different sectors – financial services, insurance, security systems & technology, infrastructure and real estate development, engineering including EPC, information technology and packaging business.
The company has now issued a postal ballot, seeking approval from shareholders to enter these businesses as opportunities come up. Piramal Healthcare may not end up entering all these businesses, but the filing sheds much more clarity on what the company plans to do with its cash reserves after selling its domestic formulations business to Abbott Laboratories for $3.7 billion last year.
“To facilitate timely decision to be taken for such business opportunities, it is proposed to seek enabling approval from shareholders for undertaking and commencing such businesses. As mentioned above, the final decision whether or not to undertake and commence such businesses would be taken after prudentially evaluating all relevant factors,” the filing said.
While Piramal Healthcare has already started establishing its presence in the financial services space, the promoters have also entered the real estate segment in their personal capacity under Piramal Realty Ltd. It has recently acquired 30,910 sq. mt. parcel of land at Byculla in central Mumbai for Rs 605.80 crore. The land parcel has been bought from Mafatlal Industries. The company has also said that it plans to start five residential projects in Mumbai at an estimated investment of about Rs 1,500 crore. In 2007, the group had also formed a joint venture with Sunteck Realty.
The current resolution enables the company to become a diversified financial services player with services across lending, portfolio management, investment advisory, private equity and insurance. The company is also looking to enter security and defence-related services, an area where Mukesh Ambani’s RIL has also entered into in a joint venture with Siemens.
Piramal Healthcare has said that it is exploring various business opportunities to invest proceeds from the domestic formulations business sale. “Toward this end, the company recently forayed into the financial services sector and established/invested in subsidiaries undertaking these businesses, including the business of real estate private equity fund and loans to the real estate development sector,” the filing said.
After the sale to Abbott, Piramal Healthcare also sold its diagnostics business to Super Religare Laboratories Ltd (SRL) in a deal valued at Rs 600 crore. According to a Sharekhan report dated May 2011, the company had net retained cash of Rs 8,707 crore after the buyback and special dividend payment. The formulations and diagnostic sale is also expected to accrue over Rs 7,000 crore over the next 3-4 years as earn-outs.
Piramal Healthcare has remained busy after these sales. The company acquired the group’s real estate equity fund management business, housed under Indiareit Fund, for a total deal value of Rs 225 crore or $50.3 million. In August this year, it acquired 5.5 per cent stake in Vodafone Essar, second largest telecom firm in the country by revenues, for Rs 2,856 crore or around $640 million.
Besides, it has also floated an NBFC called Piramal Finance to fund infrastructure and real estate development with a capital base of Rs 1,000 crore. Piramal Healthcare has also announced demerger of the new chemical entity (NCE) research unit of its public-listed associate firm Piramal Life Sciences Ltd into itself.
Some of the highlights of the businesses that Piramal Healthcare is looking at are mentioned below, but details of the same can be seen in this filing.
1. Financial & Investment Activities: These include finance, infrastructure financing, financing the development, operations and/or maintenance of infrastructure projects, acquisition financing, investment counselling, portfolio management, hire, purchase and leasing, mutual funds, private equity and venture capital, among others.
2. Life Insurance and General Insurance
3. Security and Defence-related Services: Security & intelligence systems, defence & civil aviation systems, naval & marine technological systems, aerospace technology, electronics & surveillance systems, investigation, security and protection services. The company will look to provide these services to defence authorities, police and other government bodies besides corporate houses, commercial establishments and residential premises.
4. Infrastructure & Real Estate: To acquire, construct, develop, maintain, market and provide financial assistance to real estate and infrastructure projects. These include roads & highways, inland container depots and central freight stations, ports, rail systems, airports, water supply and waste management systems, power generation projects, special economic zones, telecom systems, housing and commercial real estate projects and BOT assets.
5. Engineering & Manufacturing: To establish, maintain or develop electrical, mechanical and/or general engineers and or contractors in fields like chemical, mechanical, electrical, electronics, civil, industrial, computer and software engineering. To provide EPC services (Engineering, Procurement and Commissioning) for projects. Manufacture, design and supply all kinds of equipment, machines, components and tools required in this space.
6. Information Technology: To provide consultancy, advisory and all other related services in all areas of IT including computer hardware and software, data processing, data communication, telecommunications, artificial intelligence, etc. The filing also includes the business of conducting software and hardware courses besides computer-aided education.
7. Packaging: Manufacturer and dealers in all types of packaging like bottles, vials, containers, foils, boxes, etc.
Our Earlier Reports
Piramal Healthcare To Buy 5.5% In Vodafone Essar For $640M
Piramal To Foray Into Financial Services; Rejigs PE Fund Business