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For the Piramal siblings, it was baptism by fire

In possibly the five toughest years for India Inc, the Piramal siblings have brought a new vitality to the group's health care and realty businesses. And they've just begun

By Salil Panchal Forbes India Staff
Published: Mar 11, 2016

Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.

Nandini and Anand Piramal
Image: Mexy Xavier
Nandini and Anand Piramal

If your father is one of the richest businessmen in the country and your mother a Padma Shri awardee who has helped frame public health policy, it’s not easy to move out of their shadows. But for Nandini and Anand, children of Ajay and Swati Piramal, that was just the beginning.

The Piramal siblings joined the Rs 27,200-crore healthcare-to-financial services conglomerate about five years ago, at a time the economy had slowed down and corporate India was bearing the brunt of it.

Cut to 2016, and the two have not only steered the Piramal Group through this tough phase, but also carved a niche for themselves, heading key consumer-facing businesses and consolidating the 40-year legacy of the company.

Take Nandini, for instance. Six Augusts ago, she shot off a mail to employees, informing them about performance appraisal reviews which were to take place 10 months later, by the June of next year. She had the staff perplexed at that point, perhaps a bit cynical too, because, until that initiative, the company didn’t have a group-wide cohesiveness in HR systems. “But I wanted people to plan and finalise processes so that bonuses could be paid out in time,” says the 35-year-old.

Last year, Nandini also introduced cross-functional management development programmes for middle and senior managers across four group companies. It involves improving leadership skills, building an entrepreneurial mindset towards each business and grooming individuals for a greater role.

The consumer products division, or the over-the-counter (OTC) business of the health care segment that forms part of their holding and listed firm Piramal Enterprises, which Nandini heads, has expanded rapidly, rising to be the seventh largest of its type in India in 2015 from 40th in 2008. Last year, it acquired baby-care products maker Little’s and also five OTC brands from global drug maker Merck.

Younger brother Anand, 31, who heads the group’s real estate development business, Piramal Realty, also had a stellar 2015. Last July, private equity major Warburg Pincus said it will invest Rs 1,800 crore for a minority stake in Piramal Realty. A month later, global investment bank Goldman Sachs also announced an investment of Rs 900 crore for a small stake in the firm.

The funds will be used to expand Piramal Realty’s current real estate portfolio and acquire prime properties in and around Mumbai. The company has over 10 million square feet of commercial and residential projects under development in prime areas of Mumbai.

Says Amit Chandra, managing director, Bain Capital Advisors, “Both Anand and Nandini have learnt to build larger scale businesses. Ajay [Piramal] has let the two come into their own to play the roles of promoters and entrepreneurs.”

THE BIG LEAP
For Nandini, an MBA from Stanford Graduate School of Business, joining the Piramal Group in 2010 was a no-brainer. “I realised that it gave me the opportunity to do more at a young age,” she says. “I always wanted HR. It is a 10-year journey, which helps improve the quality of people at work. One can create change in the long term.”

The group recruits about 500 people each year—an internal team works with HR to source people from consultancy firms and the internet—but Nandini says the quality of recruiting will need to improve. The management development programme for middle-level managers is carried out once a year; while for the senior management, it is once every two years.

Consumer-centricity forms the core of all her business functions. “OTC allows us to keep in touch with what Indian consumers want. We should understand what is changing in India,” she says about the business which the Piramals started on their own in 2007 after two previous joint ventures with Reckitt Benckiser Group and Boots had ended once Reckitt acquired Boots.

This business, which currently includes brands such as Lacto Calamine, Saridon, iPill and Caladryl, clocked a 14 percent jump in annual revenues to Rs 357 crore in FY2015. And Nandini is confident that it would be in the top three in the segment by 2020. The strategy is simple: To identify niche sectors where there is a “disruption of routine” and customers are willing to pay a premium for their life to get back to normal. “People are beginning to worry about their health before they go to the doctor, and there will be more self-medication.”

The OTC business has seen inorganic and organic growth, with three acquisitions in the past five years. Their acquisition of the Little’s brand offers products for babies between ages 0 and 4 while their Jungle Magic brand offers perfumes and mosquito bands for children between ages 3 and 8. Brand extensions are also in the pipeline through sun shields and a face wash in the Lacto Calamine product. The iPill range has already introduced an ovulation kit.

Prior to her induction on the Piramal Enterprises board, Nandini was general manager (strategic marketing) at the group’s health care division, which gave her a deeper insight into the pharma solutions business.

Under Piramal Healthcare, Nandini also checks quality and risk processes at two domestically-regulated manufacturing plants at Mahad, Maharashtra (which makes nutrition vitamins) and Ennore, near Chennai, where it manufactures active pharmaceutical ingredients (APIs). “We have several cross factory and agency audits, even mock tests. We want to be audit ready, always,” she says.

GROWTH MACHINE
Anand’s journey into the Piramal world was more exploratory. It was his experience as an economics student in the University of Pennsylvania that strengthened his resolve to come back to India and “be involved” in the country’s economic growth.

In 2005, when he was on a summer programme in Italy, he shared his enthusiasm and fascination for the country with his teacher. “My Italian professor scolded me and said, ‘You should be singing paeans about Indian civilisation. Its richness is second to none’.”

When he was 19, Anand returned to India and started an NGO called DIA (Dreaming of an Indian Awakening). The organisation, which wanted to encourage the youth to take on leadership roles, was the prototype for what would later become the foundation’s health initiatives.

He found his calling in the real estate sector, which his father had identified as a key area of growth beyond the group’s traditional expertise in pharmaceutical solutions. Ajay Piramal is considered one of the pioneers of building marquee real estate properties, such as India’s first modern retail mall (Crossroads) and the Peninsula Corporate Park, both in Mumbai.

Seven years later, in late 2011, Anand was the first employee at Piramal Realty, which started operations when the sector was in a slump. “When we started, we felt that the builder lobby had let the customer down and had often over-promised and under-delivered.”

The first two years of operations at Piramal Realty were largely about buying land, recruiting people, designing buildings and getting approvals for projects. But Anand got an early fix on the growth strategy, aided by HDFC chairman Deepak Parekh, Nitin Nohria, dean of Harvard Business School, and former Emaar CEO Robert Booth, who are advisors to the Piramal Realty board.

Their internal note reveals the following strategies: Stay city-centric (Greater Mumbai in this case), because real estate is a ‘local game’ and do a few large projects rather than joint development agreements across the country. “It is easier to take care of your children if they are in one city,” says the younger Piramal. This Harvard Business School graduate is also betting on India’s growth story. “If India is to become the second or third largest economy in our lifetime, then Mumbai would be an important place to be in,” he says.

Currently, Piramal Realty is building properties in Byculla (three towers of 70 floors), Worli (two 20-storeyed projects), Mulund (two towers of 60 storeys each), a commercial property in Kurla and a residential community in Thane. All these projects would be completed in phases over the next two to five years. The team is now over a 100 people strong, which includes talent from the Gulf region too. Anand has a greater vision to become the Tata Consultancy Services of the real estate sector. Says former Emaar CEO Booth, “Anand has got his strategy right. What will be critical, particularly in real estate, is executing promises.”

But Bain Capital’s Chandra fears little for the Piramal siblings. “Both Anand and Nandini have shown capability to grow businesses, entering the business in the five most challenging years which corporate India has ever seen.”

Change Quotient
Nandini:
Building a group-wide cohesive HR policy; introduced cross functional management development programmes for middle and senior managers across all group companies.
Anand: Struck strategy to keep realty business Mumbai-centric; acquiring and developing prime properties in one region.


(This story appears in the 18 March, 2016 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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