Cash-rich Piramal picks up another 5.5 percent in Vodafone

New Delhi -  Piramal Healthcare Saturday announced it would buy a 5.5 percent stake in Vodafone India for Rs.3,007 crore ($618 million), taking the total stake of the cash-rich drug manufacturer in the mobile telecom firm to 11 percent.

Sitting on a huge cash pile after selling off one of its domestic drug formulation to US pharmaceuticals major Abbott, the Ajay Piramal-led firm had bought a 5.5 percent stake in Vodafone last year.

"The transaction follows the settlement between Vodafone and Essar over sale of Essar’s approximately 33 percent stake in Vodafone India announced in July 2011 and the purchase by Piramal of approximately 5.5 percent of the issued share capital of Vodafone India from Essar in August 2011," Piramal Healthcare said in a regulatory statement.

Piramal Healthcare, the flagship company of the Piramal group, had decided to venture into other sectors, after selling its formulation business to Abbott for about Rs.17,000 crore in 2010.

The company has already entered the financial services sector with the acquisition of private equity firms IndiaReit Fund Advisors and IndiaReit Investment Managers.

About its latest hike in stake in Vodafone, the company said, "The transaction contemplates various exit mechanisms for Piramal, including both participation in a potential initial public offering of Vodafone India and a sale of its stake to Vodafone."