VIP Industries Stake Sale: Next Generation Not Keen To Run Company, Says Dilip Piramal

VIP Industries Chairman Dilip Piramal on Monday said that the next generation of the family is not keen on running the company. The comments came after the company on Sunday notified the stock exchanges that the promoter group entities plan to sell 32% stake to multiple private equity investors, among others.

"We are a family-owned business, and the next generation is not very keen on running it," Piramal told NDTV Profit.

"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," said Piramal.

"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," he added.

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.

Post the stake sale, Dilip Piramal and group's shareholding in the company will come down to 19.73% from 51.73%.

"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," he said.

Piramal added 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."

Clarifying that he is not looking to sell beyond a 32% stake, Piramal said, "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 acknowledged that CSD (Canteen Stores Department) operations have become much more organised under the Modi government, which is a positive development.

"The company has strong fundamentals and will turn around soon, but I urge investors to be patient. Management transition is not easy," he said.

Piramal also mentioned that someone from the 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."