After more than five decades at the helm of VIP Industries, Dilip Piramal is stepping away from the driver’s seat. In a candid exchange with Fortune India, the 75-year-old chairman explains why he sold a controlling stake in the iconic luggage maker to private equity firm Multiples, what prompted the transition, and why he believes professional ownership is the best path forward. From market share pressures to generational shifts, Piramal reflects on his legacy and the need for reinvention.

What prompted you to sell control of VIP Industries after leading it for over five decades?

I have created a company which has been a market leader since its inception over the past 53 years. The recent three years, however, have been quite troublesome, as we kept losing market share. Also, the younger generation has different ambitions and interests. Hence, I felt a change of long-term management and ownership is essential for the good of the company and its shareholders. It is an accepted fact that in any family business, the fourth generation either degenerates or loses interest in running the business. Of course, there are exceptions—where even the seventh generation is doing better, and better!

How did the generational shift within your family influence your decision to step back and bring in a new ownership?

In my family’s case, when the third generation—myself and my two brothers—finished our education, we moved quite naturally into the business and performed quite well. During my time, I acquired five new companies and sold all of them after successfully running them for 10 to 25 years. I also set up 10 to 12 new factories, including a very large operation in Bangladesh, which is the world’s largest soft luggage manufacturing complex.

The current generation has other ideas. In many families, even among the richest in the country, their scions have become artists or are running restaurants. There is nothing wrong with that at all. One must pursue one’s own dreams. Many large family-owned companies—such as Dabur, Pidilite, and Marico—have become completely professionally managed and are doing extremely well.

In my case, my daughter Radhika, who was the Managing Director and CEO for eight years, has a home in London and had lived there for nearly a decade before returning to India to lead the company. Around 2017, she wished to go back to England for personal reasons. While she remained involved in the company's management after that, the company’s performance began to decline. Ultimately, I decided that the business needed a new owner who could take control of the management and infuse it with fresh energy and a new working style.

Beyond generational shifts, do you think VIP was slow to adapt to changing consumer preferences and digital-first business models?

There’s no doubt that VIP was slow to adapt to the digital platform. But we have made amends and now hold a fairly good share in the e-commerce segment.

How do you view the rise of new-age brands in the luggage space?

New-age D2C luggage brands such as Mokobara, Urban Jungle, Assembly, Nasher Miles, and Uppercase are reshaping India’s travel market by reimagining how luggage is designed, marketed, and sold. These brands combine sleek, contemporary aesthetics with functional features like lightweight builds, expandability, and smart compartments—appealing to a younger audience. Bypassing traditional retail, they’ve harnessed the power of e-commerce and social media to reach customers directly.

While their cumulative revenue is estimated at around ₹800–1,000 crore, these brands are largely backed by growth and venture capital, and driven by hungry entrepreneurs. However, they predominantly operate in the premium to super-premium segment due to their reliance on imports from China—posing a greater threat to players such as American Tourister and Samsonite.

Without domestic manufacturing capabilities, these D2C brands may struggle to compete in the mass segment.

How significant do you think was the impact on the growth of VIP, given the resurrection of Safari Industries as a competitor?

Safari has grown multiple times in the last decade. Obviously, at the cost of the two largest players, VIP & Samsonite.

Do you believe global brands will struggle to match the price-value equation of homegrown players such as VIP and Safari in India’s mass-premium market? Or will premiumisation give them an edge?

Samsonite is the only true global brand in the luggage space. Tumi, which operates in the ultra-premium segment, is also owned by Samsonite.

Why did you ultimately choose a private equity firm over a strategic buyer?

A new buyer could have been either a private equity (PE) firm or a strategic buyer—such as a multinational company or a family-owned business in India. We were in talks with both strategic buyers and private equity firms. Ultimately, we finalised a deal with Multiples, a private equity firm, along with two other parties who formed a consortium.

A PE firm is a very good choice for me because their primary objective is to significantly increase the value of their investment within a short period. Typically, they aim for a 2-3x return—or more—within a 5- to 7-year timeframe. They would be far more focused on achieving this than I or my progeny could realistically be. PE firms are simply much more motivated to drive performance than someone like me at this stage.

What were the key factors that influenced the decision for you to choose the buyer?

We had several options among both PE firms and strategic buyers—all with strong management capabilities and solid reputations. What ultimately clinched the deal with the Multiples consortium, I believe, was that the transaction value aligned well for both parties. The larger PE firms were looking at bigger deal sizes, while the smaller ones couldn’t meet our expectations. In that context, Multiples’ response during negotiations was faster and more favourable, which made the decision easier.

What are your expectations from the new owners, and why do you believe they are better positioned to revive the company? 

A PE firm’s primary objective is to create financial value by increasing its investment two to three times—or more—within a span of 5 to 7 years. This level of performance can only be achieved if they run a tight, well-managed ship. They equip themselves to do so by surrounding the business with strong managers and experienced advisers.

Our company has fared quite poorly over the past two years, and I felt it had become necessary to bring in a new owner who could infuse fresh energy and new ideas. In some ways, this situation reminds me of what professionals often experience—a kind of midlife crisis.

I recall a very good CFO we had back in 1992. He had entered a personal midlife crisis, struggling with alcohol and some domestic challenges. He had performed exceptionally well at my company, and I was quite fond of him. I advised him to consider a change—something that would force him to rework his habits and lifestyle. He took that counsel seriously, joined a reputed company, and within two years became its CEO.

I believe my company now needs a similar transformation—a change in ownership that will bring with it fresh ideas and renewed energy,

What changes are Multiples going to make? Will they change the management and what strategies have they worked out?

You’ll have to pose that question to Multiples—I won’t speak on their behalf. Our discussions have been fairly general, focused more on the events that led to the current phase rather than the company’s future operations. This is because Multiples brings with it a large pool of management expertise. They have a panel of eminent senior managers—retired from top companies—who are available to take up full-time positions in any new acquisition. In addition, they have a panel of advisors from various industries who can guide the management on strategy and operations.

What will your role be in the company after the ownership transition?

I will take on the role of Chairman Emeritus of the company, which is an honorary position and not part of the board. They will have complete control over the board, except that I have the right to nominate one director. I’ll be available as an advisor whenever they seek my input, but I don’t intend to offer any unsolicited advice.

Could M&A become a serious lever for growth?

Globally, the luggage market is extremely fragmented, with very few target companies available for mergers or acquisitions.

Looking ahead, what kind of brand repositioning or market share gains do you realistically expect under the new ownership?

The new owners of VIP are highly competent. Once they assume control of the management, they will define the strategies across all aspects of the company’s operations. If they seek my counsel, I’ll be happy to share my thoughts. In any case, all company strategies are first announced to the market and then to the media.