Not many people will bet on the person who booted them out. This rule doesn’t apply for Dilip Shanghvi, one of the most interesting, and least understood business minds of our times, who founded Sun Pharma. A top honcho from Ranbaxy who had been shown the door shortly after Sun Pharma had acquired it in 2014 confessed to me that he had invested a significant chunk of his life’s earnings in stocks of Sun Pharma despite his unpleasant exit. Another freshly sacked leader from Ranbaxy wagered wildly on Shanghvi too in 2016 “Dilip Bhai will not stop here. He will buy out Teva to emerge as the largest generic drugmaker globally. I can bet every penny am worth on this. Give it ten years”.
When I laughed and reminded him, that at the time, Teva’s revenues were four times of Sun, he refused to budge “What do you think Israel Makov is doing here?” It was true, among the many unorthodox moves, Shanghvi in 2012 had surprised everyone by choosing his own boss---Makov, the former CEO of Teva who had largely been credited for turning Teva into a global generic-drugs superpower through a string of acquisitions, leading to such speculations.
Strikingly, these incidents were reinforcing an observation that late DG Shah, then Secretary General of Indian Pharma Alliance and a long-time friend-cum-associate to Shanghvi had made, while recounting his biggest strength to me. “On his way to ascent, from almost nothing to becoming the richest Indian (he held that title for a few months after he had acquired Ranbaxy), he has made very few enemies. For a journey as steep as this in a country as complex and competitive as India, this is the rarest of rare trait”, he had shared.
But rare, Shanghvi had been in many other ways. As a child, ‘Dilpa’, and ‘Motu’ to his closest friends, he had the bizarre habit of sitting in the small wholesale medicine shop of his father in Kolkata’s Dawa Bazaar in after-school hours, obsessively committing to memory all the chemical names of the drugs, and the diseases they were meant for. When as a commerce graduate, he first shared his secret wish of starting a pharma company with his few friends in late 1970s, they simultaneously laughed and became concerned at the audacity of this guy, who neither had any degree in sciences or management, nor any capital. When a worried friend asked him, “What do you have, to start a company”, he stoically replied “It doesn’t matter what I have, what matters is what I do with I have”.
Not only did he start his dream company a few years later, but he also started it with some of the same friends, who had shared the doubt-filled room that day. A decade later, when he had shifted to Baroda, and his company was growing successful enough to be noticed by top names in pharma space, the MD hired a chemistry lecturer to brush up his fundamentals, and was a regular enough on Baroda to Mumbai trains for some of the TTEs (travel ticket examiners) to know him by face and name.
After he had made it really big, listed the company and shifted to Mumbai, his lifestyle was modest enough to not even merit a separate washroom for himself in office. No bodyguards, no private jets, no spotting in flashy parties, once I even saw him waiting at the tail end of a small crowd to get into his own office lift in Sun House in Mumbai, even as he was routinely figuring among the top 10 richest Indians on the famed lists. Even after he had toppled Mukesh Ambani to emerge as the Richest Indian for a small window in 2014, he hadn’t stopped visiting modest South Indian eateries in the by-lanes of Mumbai. As he was relishing his ‘idli-sambhar’ in Ram Ashreya restaurant in Matunga on a Sunday morning, a friend recalled someone walking upto him one of those days to quip ‘Hey, you look so much like Dilip Shanghvi! If I hadn’t spotted you in this crappy place, I would have surely mistaken you for him.’ When I asked him, why he needed to live so beneath his means, he shared his philosophy “Luxuries of lifestyle shouldn’t dictate work choices. Once luxuries become personal habits, they force their way into professional decisions”. Instead of celebrating his leap to the top of the rich lists, he was uncomfortable being famous.
Despite being so ‘anti-famous’, he was on the cover-page of all business magazines, and four books had been commissioned on him by 2015, when I met him trying to convince that a book on him is now inevitable, with or without his consent. “Your book will do much better if you spend time on leaders like Sunil Mittal, Anand Mahindra who are much more visible in media” was his advice to make a business case against a book on him. Not listening to his advice and deciding to discover the enigma called Dilip Shanghvi, has been one of the best decisions of my life.
In the age of instant gratification, Shanghvi stood for what a marathon approach could achieve. It is no mean feat that he has grown the seed capital of Rs 20,000 to a market cap of Rs 4.4 lakh crore in past four and half decades, which means had I invested Re 1 in his company when it started, it would have given me Rs 22 crore today.
But understanding him from this limited tangible lens of wealth-compounding would be missing the essence of him, just as judging him on his calm demeanour can mask the fierce intensity beneath the surface. For instance, who could imagine that beneath the mild-mannered exterior, fantasy and action are his favourite genres. A fan of Harry Potter and Avenger movie series, Shanghvi well into his 60s preferred to explore adventure sports on his vacations with his select group of friends, the same set with whom he had once started Sun.
Finally, the Ranbaxy leader has lost the ten-year-old bet to me in letter but has won it in spirit. True to his style, Shanghvi has opted for the less obvious route to emerge as a global pharma major. Through his orbit shifting $11.75 billion acquisition of US headquartered Organon---the second largest overseas takeover in the business history of India---Sun has demonstrated that it is no longer content being more of the same—attaining more scale in generics. “I learn from personalities and companies, what to do, and what not to do” he had told me.
It seems he has learnt from Teva, what not to do---overdependence on commoditised generics with low margins, debt stress due to mega M&As, litigation overhang (opioid crisis). So, it doesn’t come as a surprise that today, though Teva continues to be the largest generic behemoth globally, with three times the revenue of Sun (ex-Organon), the latter’s market capitalisation is worth more than Teva’s.
Through this acquisition, Sun has shifted its league from an Indian company with global footprint to a global company with its headquarters in India. And Shanghvi? He is already changing the way Indian Pharma sees itself by proving that they can compete globally not only on cost, but on scale, complexity, and strategic ambition. If the Organon execution goes well, it may well be the culmination of the ‘unfinished agenda’ of two of his predecessors---Parvinder Singh of Ranbaxy who had dreamt of a truly global pharma giant of Indian origin, Anji Reddy of Dr Reddy’s who had dreamt of an innovative drug from an Indian Pharma. Granted enough time, Shanghvi may well script the next chapter in Indian pharma---from imitation to innovation. And for this patient marathon strategist—preparations for this leap began at least a decade and half back.
The author is a former business journalist and author of The Reluctant Billionaire: How Dilip Shanghvi became the Richest Self-Made Indian. Views are personal.
