Piramal Healthcare, one of the leading pharmaceutical company with net sales of above Rs.2,500 crore, has decided to acquire 5.5 per cent equity stake in Vodafone Essar Ltd (VEL) from ETHL Communications Holdings Ltd for a consideration of Rs.2,856 crore. The transaction follows the settlement between Vodafone and Essar over the sale of Essar's approximately 33 per cent stake in VEL. The transaction contemplates various exit mechanisms for Piramal, including both participation in a potential initial public offering of VEL and sale of its stake to Vodafone.


Piramal Healthcare has implemented restructuring of its activities and sold its domestic formulation business with huge premium of over Rs.16,000 crore during 2010. It has also sold its 97.5 per cent holding of PDSPL to Super Religare Ltd for consideration of Rs.363 crore 49 per cent stake in joint venture Arkray Piramal Medical Pvt Ltd for Rs.17.74 crore. With selling of businesses the company has created strong reserves position and now decided to diversify into new avenues like financial and telecom services. After the announcement of acquisition of stake in VEL, the Piramal Healthcare scrip opened at higher level at Rs.373.30 in the morning session today and went up to Rs.375.90 with a gain of Rs.6.50.


Recently, Piramal Healthcare has entered in to financial services sector by acquiring Indiareit Fund Advisors Pvt Ltd and Indiareit Investment Management Company for a consideration of Rs.225 crore. Indiareit Fund Advisors are advisors to the Indiareit Fund which is domestic real estate private equity fund focussed on the Indian markets. Indiareit Investment Management Company is managers to offshore Real Estate Private Equity funds investing in India through the FDI route Total funds under management for these funds is Rs.3,800 crore.


Earlier, the company has completed the buy back of 41,802,629 equity shares (which includes 705,529 shares accepted from Overseas Corporate Body, which has been kept in abeyance pending receipt of requisite approval from Reserve Bank of India)of Rs.2 each through a tender offer at a price of Rs.600 per share. The total consideration worked out to Rs.2,508 crore.