Piramal Healthcare Chairman Ajay Piramal, who picked up an additional 5.5 per cent stake

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in the country's second largest mobile operator Vodafone on Saturday, described the move "a short-term investment", saying that he will cash out when the telco goes public.

"We are merely a short-term investor in Vodafone. We don't want to be in the telecom sector for the long-term. We have three options to exit.

"We could exit whenever Vodafone comes out with its initial public offering (IPO), or we could sell our stake to other companies, or we could even sell it to Vodafone itself," Piramal told reporters here today.

"If we use the IPO route to exit, this will depend on the valuation," he added.

With the latest transaction worth Rs 3,007 crore, Piramal Group has 11 per cent stake in the domestic unit of the world's largest mobile operator by revenue. Also, with this, Vodafone's original partner, Essar Group, has completely exited the joint venture. The additional stake was picked up from ETHL Communications Holdings of the Essar Group.

Piramal said his company chose to invest in Vodafone for the short-term because of strong growth prospects.

"The telecom story is still positive and the Supreme Court ruling brought more clarity about tax matters. We invested because we had funds available.

"This is a short-term investment on which we expect 17 to 20 per cent returns in around 18 months," Piramal said.

In the wake of a positive tax verdict by the Supreme Court and cancellation of 122 2G licences issued in January, 2008 by the Court in another case -- which would lead to a much-needed consolidation in the fiercely competitive telecom market -- Vodafone's going public is only a matter of time.

The parent Vodafone Group has reportedly roped in investment bank NM Rothschild to assist in the IPO launch.

When asked if he has any plans to further increase the stake in Vodafone, Piramal denied the possibility.

Piramal Healthcare plans to pursue more opportunities in drug discovery, over-the-counter drugs market, contract manufacturing for foreign companies and critical care segment, he said.

"We are pursuing opportunities in drug discovery and we are optimistic that our efforts might even result in a product launch," he said, without giving further details.

He also indicated that the group may ramp up activities of its non-banking financial company arm as well as the real estate arm. "Our private equity arm headed by former State Bank of India chairman A K Purwar will also be looking at appropriate opportunities," Piramal said.