Mumbai: Ajay Piramal, known for raking in huge profits from his investments, has repeated his streak by selling the nearly 10 per cent stake his group has held in Shriram Transport Finance, making a net gain of Rs 653 crore in just six years.
In May 2013, Piramal Enterprises had picked up 9.96 per cent in Shriram Transport Finance, which specialises in financing second-hand trucks, from the Chennai-based Shriram Group for Rs 1,652 crore and Monday the entire stake was sold through stock exchanges for Rs 2,305 crore.
“We have sold our entire direct investment of 9.96 per cent in the fully paid-up share capital of Shriram Transport Finance Company to third-party investors on the floor of the stock exchange,” Piramal Enterprises said in a regulatory filing Monday.
As of end March 2019, Piramal Enterprises held 2.26 crore shares amounting to 9.96 per cent stake in Shriram Transport Finance Company.
Though the exact sale price is not immediately available, it has been learnt that the stock has been sold for Rs 1,000-1,015 apiece, a 40 per cent return in six years.
Piramal has been looking to exit the Shriram group, and had even tried in vain to merge the group with IDFC group in 2017.
Apart from Shriram Transport, Piramal also own stakes in Shriram City Union (10 per cent) and 20 per cent in Shriram Capital. He picked up stakes in these two companies in 2014 and in 2015 became the Shriram group chairman. His holding in the Shriram group is worth over Rs 9,000 crore against a total investment of Rs 4,600 crore.
Piramal had earlier made hefty profits with investments in telecom major Vodafone.
Over the past decade, the Piramal group has completed over 20 acquisitions and partnered with global companies like Merck, Eli Lilly, Pfizer, Abbott, Bio-Syntech, Bayer etc.
Piramal Enterprises has presence in sectors such as pharma, financial services and healthcare information management.
While acquiring the stake in Shriram Transport Finance in 2013, Piramal said had said, “this acquisition is in line with our strategy for building our presence in financial services sector and we see long-term shareholder value creation from this stake acquisition.”
In April 2014, the group had acquired 20 per cent stake in Shriram Capital, the financial services arm of the Shriram Group, for Rs 2,014 crore and with that Piramal became the chairman of the Shriram group. Later in June 2014, Piramal had acquired 10 per cent stake in Shriram City Union, the retail focused non-banking financial company of the Shriram Group, for Rs 790 crore.
Other investors in Shriram Capital include TPG, Singapore sovereign wealth fund GIC and Abu Dhabi Investment Authority.
The Piramal has interests in pharma, financial services, real estate, healthcare analytics and glass packaging and is present in over 30 countries, including the US, the EU, Britain, Japan, Asia-Pacific and South Asia and nearly 46 per cent of its revenue from overseas.
In 2010, Piramal had sold the domestic formulation business to Abbott for USD3.8 billion. Still present in the pharma sector, it focuses on over-the-counter consumer products, global generics, contract manufacturing and critical care business.
The company has also launched a stressed asset fund with Bain Capital, known as India Resurgence Fund (IndiaRF).
Shares of Piramal Enterprises closed 3.55 per cent down at Rs 1,995 on the BSE and that of Shriram Transport Finance plunged 6.15 per cent to Rs 1,015 on BSE, whose benchmark plunged 498 points or 1.25 per cent on a day that was spooked by Indo-US trade worries and rising oil prices.