Ajay Piramal, owner of Piramal Healthcare has been expecting 17-20% annual returns after its acquisition of 5.5% equity stake in Vodafone Essar which he announced recently.

Piramal healthcare Limited has acquired this stake for Rs. 2856 Cr (Approximately $ 640M), valuing VEL at $11.6Bn which means INR 52, 500 crore. The company can opt out of investment during the Initial Public Offering (IPO) or can trade again with Vodafone.

Pirmal revealed that “The firm had the option of exiting the investment through an initial public offering if Vodafone chose to get listed on the Indian stock exchanges in the future”.

After the deal, Vodafone is rendering with 69.5% hold in VEL, as foreign countries are not allowed more than 74% ownership in domestic mobile-phone operator, as per the Indian regulation.

In a conference, Pirmal stated that the company will be investing Rs 7,000 crore in pharmaceutical business by 2016 as it has a cash balance of Rs 10,000 crore at present.

Though Indian government has laid $2.5Bn tax on Vodafone Essar, its IPO will depend on the company’s claim.

The shares of the Piramal Healthcare opened at Rs. 376.40 on the BSE and its closing was at Rs. 369.40.