Ajay Piramal, Indian Billionaire, Claims 'Nowhere to Dump My Billions'
An Indian billionaire tycoon claims he has loads of cash but nowhere to invest it.
Ajay Piramal, who is head of renowned conglomerate Piramal Group, refuses to invest billions domestically due to increasing fears for India's doomed economy, according to The Associated Press.
Although India's economy is the ninth largest in the world, alleged ongoing bureaucratic corruption and red tape scandals are forcing valuable investors like Piramal to lose confidence and ultimately take their business outside of India.
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Piramal also accuses India of being significantly slower than its international competitors regarding various factors, including infrastructure.
The tycoon claims that he has tried to invest domestically, but was faced with the prospect of significantly slower profit growths and slim profit margins.
In one instance, Piramal was eager to invest billions with the expansion of one of his chemical plants but was told that expansion would take at least five years.
"The same plant could be set up in China in two years. … I love India, but my customer is not going to wait," Piramal said, reports AP.
“Every large investment, there was no transparency,” Piramal added.
Piramal admits that while there is no shortage of proposed investments, the problem generally lies in the incompetence and greed of the domestic businessmen that are presenting the proposals. Many Indian businessmen are alleged to be linked with corrupt politicians, and could practice "creative accounting," which would almost always results in near profitless investments.
"And yet [the businessmen] were coming to us saying we have licenses and approvals. That just didn't sound right or smell right," Piramal said.
Piramal's reluctance to invest domestically is not unusual, and is the result of a common sense business mentality according to Jagannadham Thunuguntla, head of research at SMC Global Securities.
Thunuguntla pointed out that a number of major Indian infrastructure companies suffered terrible losses since 2007, devaluing four of those companies by up to 80 percent.
"Infrastructure investment has become untouchable, a sure way of losing money," Thunuguntla said.
