Refreshing Candour in Indian Corporate Transition

It is rare in India’s corporate landscape to see a business patriarch speak so openly about failure. Yet Dilip Piramal’s recent interview to CNBC-TV18 explaining why he is selling a controlling stake in VIP Industries to Multiples Private Equity is striking precisely because of its disarming honesty.

There were no platitudes, no vague references to “unlocking shareholder value,” nor any attempts to sugarcoat the reasons behind the stake sale. Instead, Piramal laid bare what most would prefer to mask: VIP’s loss of market leadership, declining market share, four consecutive quarterly losses, and a family disengaged from daily management.

This sort of directness is a whiff of fresh air in an environment where promoter communication can often be opaque, defensive, or aggressively self-congratulatory. Piramal admitted bluntly that VIP had hit a downward spiral and that “good management, nothing else” was required to arrest the decline. He made no effort to shield himself from criticism, acknowledging that even with professional managers in place, VIP had failed to adapt to changing market conditions, especially as the luggage industry shifted from soft to hard cases and new direct-to-consumer players emerged.

That candour extended to personal decisions as well. He described how his daughter, who once served as managing director, chose to step away to pursue her own life in England. Rather than forcing a next-generation succession, he acknowledged the changing ambitions of family members and refused to romanticise continuity for its own sake. In an economy still full of family-run firms trying to maintain dynastic control at any cost, that level of realism is instructive.

Piramal also did not hide from the uncomfortable fact that he had the chance to sell the company at a much higher valuation two years ago, when VIP’s share price exceeded ₹700. He admitted they turned down offers then because management overestimated growth prospects. Today’s sale at ₹388 a share is a sober corrective, one he did not try to spin away.

Yet the interview is not just an exercise in confession. It also reveals the logic of his next bet: private equity. Piramal argues that PE firms have “skin in the game,” an unrelenting focus on value creation, and are willing to take operational control in a way many family owners resist. His plan is clear: step aside entirely from the board, remain only as Chairman Emeritus, and trust Multiples to make the tough calls required to turn the business around.

Of course, even as he points fingers at management for VIP’s stagnation, there is an implied responsibility on his part. Management teams rarely operate in a vacuum. They often look over their shoulders at the promoter’s preferences, approval processes, and strategic choices. In acknowledging that failure and still choosing to sell controlling interest, Piramal implicitly accepts his own role in the underperformance.

The deal also aligns incentives. By retaining a 20% stake that he must eventually reduce, he is betting on Multiples’ ability to drive the share price back up. He wants his remaining stake to benefit from the very management discipline he now admits was lacking. That, too, is an unusual degree of alignment and transparency about motives.

Piramal’s openness stands out at a time when many promoters are unwilling to cede control or admit strategic missteps. His interview did not just announce a transaction. It told the truth about why it had to happen, how he had come to terms with that, and why he believed a new owner was better suited to run the company.

It is, of course, another matter entirely whether a private equity-injected management team will succeed where a promoter-backed professional team failed. That is a subject for another discussion. What is clear now is that Piramal has chosen to face up to hard truths about VIP’s decline and communicate them without evasion.

Such candour is good for investors, good for markets, and good for corporate governance. It is a model for how difficult transitions should be communicated in India Inc: with honesty, humility, and a clear rationale for change.