Piramal Pharma (PPL), which got listed on the bourses on Wednesday, has earmarked a capex of about Rs 1,200 crore over the next 24 months, even as it is not looking to raise funds from private equity firms.
In an interaction with FE, PPL chairperson Nandini Piramal said: “We’ll do a brownfield capex of about Rs 1,200 crore to expand capacity over the next two years, as we have already done some expansion over the last two years. We should see capacity expansion in new products.”
The capex would be for both its India and overseas expansion plans.
The company, which has about 50% of its manufacturing facilities based out of India, would not be looking at any offshore listing “anytime now”.
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“In the next three to five-year timeframe, we expect to do a 15% organic growth from where we are now in terms of topline and can expand margins to the 20s. This should come through new products and capacity expansion,” she said, adding, the company would look at inorganic growth if there were “right valuations and opportunities”.
PPL, which had raised funds from US private equity major The Carlyle Group in 2020 in lieu of a 20% stake, is now not looking at raising any further funds from PE firms.
“We are very happy with Carlyle and we are not looking for another large PE at the moment,” she said, PPL would look at bank debt if it needs.
PPL got listed on Wednesday at Rs 201.8, which she termed as a “fair value”.
“When we started out and diversified, each of the businesses was very small and we needed to reach scale. Over the last few years, we reached a scale where they can be independent companies. We started getting a lot of questions from shareholders, bankers, creditors and regulators stating that the risk rating for these two businesses is very different and you need to actually separate it out to be more clear about what you are doing,” she added.
In October last year, Piramal Enterprises’ board approved the demerger of its pharmaceutical business – PPL – through a composite scheme of arrangement.
Following the listing, Carlyle would continue to hold a 20% stake in PPL, with the Piramal family owing a 35% stake and the public holding the remaining stake.
“Carlyle has no plans to exit now,” she added.
