‘Next generation not very keen on running it’: VIP's Dilip Piramal on selling 32% stake in ₹6,800 Cr company

Dilip Piramal, Chairman of luggage company VIP Industries, is set to sell a 32% stake in the company, which ruled the Indian markets for over five decades. He disclosed that the younger generation of his family is not interested in managing the business.

Dilip Piramal sells stakes

"We are a family-owned business, and the next generation is not very keen on running it," Piramal told NDTV Profit on Monday, a day after the luggage company informed stock exchanges of the significant divestment.

He said, "In all our 53 years of existence, VIP has been the market leader. But in the last five years, we have been losing market share. Last year, we reported losses in all four quarters."

"The company is facing a lot of management problems, hence it's going to be a struggle for the first time. In 2-3 years, we should do well," Piramal added.

VIP Industries has a market capitalisation of Rs 6,830 crore, as reported by financial services website AngelOne. After the stake sale, Dilip Piramal and the group's shareholding in the company will fall to 19.73% from 51.73%.

The sellers include Dilip Piramal and various entities forming part of the promoter group, Kemp and Company Ltd., DGP Securities Ltd., Kiddy Plast Ltd., Piramal Vibhuti Investments Ltd. and Alcon Finance & Investment Ltd.

"For me, it's important to safeguard shareholder interests, which aligns with my own. The only viable path forward was to bring in a new management team with ownership interest," Piramal said.

He shared that after several rounds of discussion, the company has found a private equity investor. "A private equity player suits us well, as their goal is to double or triple their investment in 2-3 years," he told the outlet.

Piramal further said that he is not looking to sell beyond a 32% stake.

"I don't need the money. I need good value for my shares. The company is facing significant management issues, so the road ahead will be challenging initially," he said.

He shared that the company has "strong fundamentals and will turn around soon". "I urge investors to be patient. Management transition is not easy," he added.

Piramal also mentioned that someone from his family will continue to hold a seat on the board.

Speaking on growth, he said, "International markets are a promising opportunity for us. We have the potential to become a multinational company. India is very well suited for the luggage industry."

Also read: Delhi HC pulls up Wipro for defamatory termination letter, orders to pay ex-employee ₹2 lakh in damages (startuppedia.in)