Business tycoon Ajay Piramal-led Piramal Enterprises has decided to de-merge its healthcare and financial services businesses to grow the unrelated divisions separately, marking an important turn in the legacy of the diversified conglomerate. ET was the first media house to report on this change in structure this February.
The Piramal Group, which was primarily a pharmaceutical business, has diversified into areas such as finance, private and real estate funding in the past five years. ‘It is our intent to simplify the structure going forward and create focused business, in the process and also unlocking value of our shareholders’ said the company in a statement on Monday.
“Today, what is happening is that we are getting conglomerate discount. As we go forward, we split them up separately, unlocking the value,” Piramal had told ET in the February interview.
“There will be lower cost of raising capital. You will have a better understanding of the customer,” the business head had added in the earlier interview.
Piramal curtailed his presence in healthcare after he sold erstwhile Piramal Healthcare’s domestic formulations division for $3.7 billion to Abbott in 2010. He used the cash to enter the finance business through strategic investments and joint ventures.
Date: 16th May, 2016.