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While the Media has been focusing merely on Piramal’s cash pile, and have rather been supremely obsessive about it, Ajay Piramal has had most of his investments show green shoots already. From approval of 2 drugs by the USFDA and the EU and IndiaREIT growing to manage over 7,500cr the media has missed a lot of developments which are compounding machines. Now that the entire Vodafone magic is done, I hope they learn to focus on the true Genius of Ajay Piramal. Here is a little update on his investments since 2010.

Company/Entity Asset Description Price Current State
NCE

(New Chemical Entity)

8 compounds in treatment of Cancer, Diabetes and Metabolic Disorders. Approx 220 cr (62,50,000 shares of PHL issued to PLSL shareholders @ 340 ) All passed pre-clinical.

 

Received awards for Good Lab Practices

 

No Inflows of cash from here

 

200% depreciation for all R& D expenses prove to be great tax planning instrument.

IndiaREIT Real Estate Investment Management Company 230 cr for Goodwill and rights. Team currently manages 7,600 cr of assets. 1% annual commission is 76 cr or a 33% ROI. Obviously the company is capable of making much more than this as their fee is based on both management and success.
DRG and ABACUS Information Management $650 million or 4,150cr when the dollar was at 50 rs. 980 cr appreciation in just dollar differential terms.
Bayer Florbetaben or Neuraceq

Imaging for Alzeihmers

Undisclosed USFDA Approval received in March 2014.
Bio-Syntech  BST-CarGEL

Cartilage Re-generation

20 cr European Union approval received.

USFDA approval pending.

Vodaphone Equity Stake 5,864cr Exited at 8,900 cr. profit 3,036 cr.
Caladryl Anti Allergy for Skin Undisclosed Market Leader along with Lacto Calamine – also owned by Piramal
Ipill Oral contraceptives bought in 2010 from Cipla 95 cr Market Leadership position.

Now expanded to i-Can and i-Sure.

Shriram Transport Finance 9.9% Stake 1,636 cr CMP 1,641 cr. Premium paid has been covered.
Shriram Capital 20% Stake

Holding Company for Insurance, Transport Finance, Gold and other finance group companies.

2,014 cr Unlisted
Shriram City Union Finance  9.9% Stake

MSME lending 

790 cr Part of the shareholding is to be freshly issued equity

Of the three rather broad and deep verticals of Pharmaceuticals and Research, Information Management & Financial Services and Real Estate, the only vertical that we have never seen Ajay’s magic is the Information Management  space. While the company is still just 22 months old in the Consolidated Balance sheet, there have not yet been any obvious green shoots apart from the fact that the company is worth 980 cr more due to the dollar appreciation. Indirect benefit to the CRAMS sector however is unknown. Lets hope that this investment does not turn out to be a lemon.

Though the Consolidated statements continue to show a company overburdened with debt the standalone EBIT of the company has increased 146% from 172 cr to 424 cr. Assuming a full 30% tax, the PAT would be about 300cr, almost the same as BioCon Ltd’s 330cr PAT, and here is the best part, BioCon Ltd’s M.Cap is 9600 cr and @ 580 Rs per share with and inbuilt dividend of Rs 52.50, Piramal Enterprises is still trading at a M.Cap of 10,000 cr.

Yes, you can smile now.

Hop in, this flight has still not taken off.

And oh, BTW Piramal is taking the Diabetes problem super seriously as it now has taken over the selling and distribution rights of Equal. Sweeeeet !

 

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