PremjiInvest has bought 1.66 percent stake in VIP Industries at Rs 460 per share. With this, the promoter stake has declined to 50.47 percent. To know about the reason behind the sale, CNBC-TV18 spoke to Dilip G Piramal, chairman of VIP Industries.
Piramal said, “In the past two years, we did not get any dividend, we had certain personal requirements. It was for liquidity and also some philanthropic activities, which got stymied because of lack of liquidity.”
Rakesh Jhunjhunwala moved out of the industry last year. Piramal believes Jhunjhunwala is now finding other areas where he feels there is more growth. “Investors keep on changing, he has made good money in the last 10 years or so. He has changed his entire portfolio and gone out of consumer goods in a big way,” he said.
The company revised its budget upwards this year in February as things were looking positive. However, the whole country was taken by surprise by the second wave of COVID and Q1FY22 was washed out.
In terms of growth, Piramal mentioned, “April to June is our largest quarter – it was washed out this year. We are seeing signs of good growth. Domestic travel is becoming fairly normal but international travel is quite low, things are looking better.”
He further mentioned, “There is a fear of a third wave of COVID but the general feeling is that the government and all the other authorities are well-equipped and prepared for the third wave.”
“Volumes are about 60 percent of pre-COVID levels,” he said.
He also said that he sees tremendous opportunity in international markets.
“We have our own manufacturing in Bangladesh which is probably a very low-cost destination for manufacturing, and with China becoming expensive – luggage industry will gradually move out of China to Vietnam and other areas – I think we will have good opportunities in the international market. I am very confident that this will be a new trend,” Piramal said.
For the full interview, watch the accompanying video.