MUMBAI: From assisting his father in the wholesale generic drugs business to starting his own psychiatric drug manufacturing company in 1983 with just a few thousand rupees, and then going on to become the owner of the world’s fifth largest generics player, Dilip Shanghvi has literally come a long way. His journey has been peppered with stories of both trials and triumphs — something budding entrepreneurs can draw inspiration from. There’s no surprise then that this commerce graduate, who left reading comics and novels a long time back to opt for hard core management books, is regularly showered with accolades and awards for his leadership skills.
The one thing that stands out in this billionaire’s success trail is that his drug empire was largely built on acquisitions. The 58-year-old soft-spoken and media-shy managing director of Sun Pharma has made 17 acquisitions so far, and these have helped catapult his once Rs 7 lakh-enterprise into a mega $4.2 billion firm today. When quizzed about his ambition of becoming the world’s largest generic company, he says “size does not excite us”. It’s the quality (of asset) and ability to manage which he pursues.
What’s more, he even has a global footprint in 65 countries. Some of his notable transactions include the purchase of US-based Caraco, Israel’s Taro — for which he fought a long-drawn battle to eventually gain control — and Monday’s buy of Gurgaon-based Ranbaxy Labs. Most of Shanghvi’s acquisitions were crisis ridden assets, which he has capably turned around. He is known for successfully steering the ship by taking over companies with “distressed assets”, and making them profitable over the years. A case in point is the Taro acquisition where Sun invested $450 million in 2007, which grew 10 times to $4 billion in 2010, and the recent buy of URL Pharma, where it pumped in $80 million and got the money back in just a year.
However, the biggest challenge for Shanghvi would perhaps be his latest trophy — Ranbaxy.
Novartis India country president Ranjit Shahani says, “It would be interesting to see how Dilip Shanghvi manages to steer Ranbaxy, which is currently going through a rough patch riddled with troubles with the US FDA on quality issues in its factories that led to a $500 million fine, losses and ban on its drugs exports to the US.”
Will the turnaround specialist be able to script a success story this time around? Industry experts believe he can, given his past experience and success in turning around distressed assets quickly.
The man, who is aptly described for his simplicity and one who relinquished the chairman’s post to a professional, might just emerge lucky this one more time. After all, the meaning of his name Dilip is protector. Given the sticky situation that Ranbaxy has landed itself in, the company could not have sought a better protector than Sun Pharma.