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Piramal Enterprises (PEL) recently announced a buyback of 14 million shares, worth ₹1,750 crore. The buyback price is ₹1,250 per share, representing a 16 per cent premium to the market price on the date of the announcement. AJAY PIRAMAL, chairman of Piramal Group, discusses a range of topics, from the rationale behind the buyback to the group's banking aspirations, in a video interview with Manojit Saha. Edited excerpts:

- Manojit Saha

What was the reason for the share buyback?

We had invested in Shriram Group, and a portion of that investment was monetised at the end of June, yielding ₹4,820 crore. This brings our networth in PEL to ₹31,000 crore.

Our debt-to-equity ratio stands at only 1.2. Consequently, we are over-equitised from the perspective of a financial services company. Moreover, in terms of networth among private non-banking financial services company (NBFC), we rank as the third largest. Even if we were to double our book within the next four years, we would still possess ample equity.

We also wanted to reward our shareholders. The stock has taken a beating in recent years, so we aimed to give back to our shareholders. Importantly, this buyback is designed to reward minority shareholders, as promoters are not participating. I wish to emphasise regarding promoters that during recent rights issues-after 2018 and during the pandemic-we raised money through rights issues, with promoters investing in them. However, they are not partaking in this buyback. Therefore, in a way, we have retained around 3,500 crore in terms of equity in the company.

How does the cash position of PEL change after the buyback?