When billionaire Ajay Piramal sold his successful pharmaceutical company Nicholas Piramal to Abbot in 2010, many people were surprised. After all, he has been in this business for decades, but few remember that in the late 80s, before he purchased Nicholas Labs, he was running a textiles company and a machine tools company!
Today, the $4 billion Piramal Enterprises spans sectors as varied as pharmaceutical and financial services and makes a third of its revenue outside India. The larger Piramal Group has interests in real estate and glass manufacturing as well, with offices in over 30 countries.
After he completed business management from Jamnalal Bajaj Institute of Business Studies, entered the family business, his father handed him a newly acquired company called Miranda Tools to run – an experience that later helped him deal with the many companies he would acquire in his illustrious career ahead.
A wide portfolio
A young Piramal had initially faced many hardships including the labour troubles in the textile sector, before he made his entry into pharmaceuticals. That’s when the world saw his penchant for striking deals – a move which diversified the company across the entire range of drugs. He scooped up the domestic manufacturing plants of many multinational pharma majors like Roche, Aventis and more and it helped that back then MNCs were exiting India.
Thanks to the many deals he made including buying a glass maker and bulk drug maker and by the time he sold the company, it had presence across the therapeutic range right from antibiotics to dermatological drugs to cardiovascular products. The merger with Boehringer Manheim added diabetics and even diagnostics range to its ever growing portfolio that helped it balance risks as a number of drugs’ prices were controlled by the government in the 2000s.
The joint venture specialist
Piramal also took a visionary approach to his business unlike most of his peers who were reverse engineering drugs in the domestic business earning ire from Big Pharma. Instead he struck joint ventures with MNCs like Boots and Allergan – some of whose brand rights were transferred to the business. By the time the company was sold to Abbott at a spectacular valuation which is 30 times the profit it was making, Nicholas Piramal had six Over-The-Counter brands in the top sellers list along with presence in every other therapeutic range.
But Piramal’s move to sell to Abbot that left him with $1.6 billion of personal wealth, was also not his career best masterstroke. That distinction is reserved to investment and exit in Vodafone India within two years that left him with around $500 million gain with over 50% returns! He was one of the few people who would ever gain from Vodafone India, which later got mired in multiple controversies and has been struggling to survive in the recent past.
It is this knack to sense opportunities quickly and clinch deals at the right time has earned him an interesting title – the Warren Buffet of India.
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