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CHAPTER 1.

THE GREAT ENTREPRENEURS OF INDIA

1.1 GAUTAM ADANI

1.2 DR. KALLAM ANJI REDDY

1.1 GAUTAM ADANI

GAUTAM ADANI
Gautam Adani is an Indian business tycoon who founded the Adani Group, a multinational
conglomerate company headquartered in Ahmedabad, India. Founded in 1988, the company is
today a major player in coal trading, coal mining, oil & gas exploration, ports, multi-modal
logistics, and power generation among others. Born into a business family, he undoubtedly
inherited his forefathers business acumen but did not develop any interest in the familys textile
business. Ambitious as a young man, he dropped out of school and moved to Mumbai from
Ahmedabad to seek his fortunes. He ventured into diamond brokering where he found great
success within years and was soon a millionaire. He returned home on the behest of his brother
to help him run a small plastics factory.

An entrepreneur at heart, he eventually set up his own business, Adani Enterprises, which
became the Adani Groups flagship company. Initially dealing in export and import of
commodities, the business soon expanded to encompass coal mining, ports, power generation,
Agri Infrastructure, edible oil & transmission and gas distribution, among other ventures. He is
known for being a risk taker whose business strategy revolves heavily around excessive leverage
and political patronage. His phenomenal success as a first generation entrepreneur often leads to
comparisons with another Gujarati entrepreneur, Dhirubhai Ambani, the founder of Reliance
Industries.
Unlike many businessmen, Adani didnt inherit his power and position. Hailing from a typical
Gujarati-Jain family, Adani had a natural propensity for dhanda flowing through his veins. His
parents, Shantaben and Shantilal Adani, had migrated to the city of Ahmedabad from a small
town called Tharad in Norther Gujarat in hopes of securing greater opportunities for their eight
children. Supporting eight children was difficult, and understandably, money was a luxury for the
Adanis.
His had his first encounter with Lady Luck when he procured a job as a diamond sorter at the
Mumbai branch of the Mahindra Brothers. Soaking in the A to Z of the trade, while also
simultaneously making mental notes on the changing markets, he set up his own diamond
brokerage at Zaveri Bazaar, the unrivalled jewellery market of the city. This was his first big
break.
A year later, his older brother, Mahasukh Adani, bought a plastic unit in Ahmedabad and
requested him to return home and run the franchise. This turned out to be a turning point in
Gautams life. His decision to import polyvinyl chloride, a key industrial raw material, marked
his advent into the global trading market.

Economic liberalisation proved to be a blessing to Gautam. Using the situation created in the
markets to his advantage, he established the Adani Group in 1988. During its initial years, the
soon-to-be multinational conglomerate focused on agricultural commodities and power. By 1991,
the company had grown in both resources and power. Gautam believed that the time was right
for the company to diversify its commodities and interests.
Since then, the Adani Group has emerged as a diversified Energy and Logistics conglomerate
with key interests in Power Generation and Transmission, Coal Trading and Mining, Gas
Distribution, Oil and Gas Exploration as well as Ports and Special Economic Zones. Despite
owning this business giant with a flagship of over several billion dollars, Gautam never forgets
his humble beginnings. Thus, he makes it a point to give back to society. With the support of his
wife, Priti Adani, a Dentist and Managing Trustee of Adani Foundation, the Adani Group is tied
to a number of philanthropic organisations associated with Education, Community Health,
Sustainable Livelihood Development and Rural Infrastructure Development.

VISION
Accomplish passionate commitment to the social obligations towards communities, fostering
sustainable and integrated development, thus improving quality of life."

MISSION
To play the role of facilitator for the benefit of the public without distinction of caste or
community, sector, religion, class or creed, in the fields of education, community health, and
promotion of social and economic welfare and upliftment of the people in general.

Gautam has had his fair share of rifts with the government as well. He has faced controversy
over some of his land dealings in business not being sanctioned properly. Along with this, many
of his business industrial units dont have clearance from the environment authorities of the
state, leading to further ruffles with the High Court.
However, Gautam chooses to face his issues with his head held high. Dealing with the
government does not mean you have to give a bribe, he has often been heard saying at public
events. Despite these issues, Gautam even managed to tackle and take down Sajjan Jindal, the
Chairman and Managing Director of JW Steel, acquiring the much sought-after Udupi Thermal
Power Plant at Rs 6,000 crore. Rumour has it that Gautam sealed the deal in less than two days!
On his 54th Birthday, we salute the inspiring journey and hard-earned success of Gautam Adani, a
beacon of focus and determination. As he has often said, the key to success lies in constant
learning. With this as his mantra, he trots off to acquire yet another billion dollar enterprise.

GAUTAM ADANIS PERSONAL BACKGROUND


He was born in a Gujarati Jain family to, Shantaben and Shantilal Adani who had migrated
from the town of Tharad in northern Gujarat in search of a livelihood. Adani has seven
siblings the eldest being Mansukhbhai Adani. Gautam is married to Priti Adani, who is a
dentist and heads Adani Foundation as a Managing Trustee. They have two sons namely
Karan Adani who is the elder of the two and is married to Paridhi Shroff, the daughter of
Cyril Shroff, arguably the biggest name in India's corporate law terrain and Jeet Adani is their
younger son.
He completed his schooling from Seth CN Vidyalaya in Ahmedabad and then enrolled
himself for as Bachelors Degree in Commerce at Gujarat University. It was when he was
pondering over accounts and statistics, he realised academics was not for him. Instead, he felt
that he could be using his time to do bigger and better things. While still in his second year,
Adani shocked many by dropping out of college. With only a hundred rupees in his pocket,
he took off to the City of Dreams Mumbai
At a young age of 18, he went to Mumbai with only a few hundred rupees and worked as a
diamond sorter at Mahindra Bros. After 2 years he set up his own diamond brokerage outfit
at Zaveri Bazaar. His elder brother Mansukhbhai, bought a plastics unit in Ahmedabad in
1981 and wanted Gautam to run it.
Adani returned to Ahmedabad and this was the beginning of Adani's journey into global
trading by beginning to import Polyvinyl Chloride (PVC) which is a key raw material for
manufacturing plastics.

BEGINNING OF GAUTAM ADANI'S CAREER


While working at his brother's plastics unit, Adani gained valuable working experience of
working with the intricacies of Global Trade. During the late 1980s young entrepreneurs
were looking to enter the relatively new and exciting sectors of Software and Telecom.
But Adani ventured into what merchants and East India Company used to do 1000 of years
ago under the British rule. The Adani Group, along with its flagship company, Adani
Enterprises Ltd. (formerly known as Adani Exports Ltd.), was established by Gautam Adani
in 1988 as a Partnership firm with a capital of 5 lacs.
The Adani Group had a quiet beginning, but Adani used his skills of persuasion to get
beneficial

land

allotment

policies

and

guidelines

from

the

bureaucracy.

Adani's entrepreneurial and ambitious vision along with rigorous hard work made the Adani
Group one of the fastest growing professionally owned enterprises in India.
Maintenance of world-class quality standards and a customer focused approach helped the
Adani Group to achieve revenues of INR 262 billion by 2009.

ABOUT ADANI GROUP - COMPANY PROFILE

Profile : Adani Group


Type : Public Limited Company Industry
Conglomerate Founded : 1998
Founder(s) : Gautam Adani
Headquarters : Ahmedabad, Gujarat
Area Served : India
Key People : Gautam Adani (Chairman)
Products & Services : Resources, Logistics, Energy & Agro business, Trading, Power, Oil
and Gas, Infrastructure, Ports & SEZ, FMCGs, Mining, Agro business, Education, Call

Center
Revenue : US$ 9.2 Billion (2014)
Operating Income : US$ 1.1 Billion (2014)
Profit : US$ 447 Million (2014)
Total Assets : US$ 14.64 Billion (2014)
Employees : 10,400 (2013 year ending)

With Gautam Adani as the Chairman and Promoter, the Adani Group is a Gujarat based
Indian conglomerate. The group's core businesses include commodities trading, edible oil
manufacturing, Mundra port operations and distribution of Natural Gas.
Its journey to become one of Indias most trusted and diversified trading house was fast and
worth imitating. Apart from its core businesses, the Adani Group has also diversified into
Real Estate, Ports, Special Economic Zones and IT enabled services. Its expansion was
accompanied by a synergy among its business units to bring them together and make them
more productive and competitive. Their corporate office is headquartered in the city of
Ahmedabad, India.
The group emphasizes on converting partnerships into winning relationships and is
committed to satisfy its stakeholders by constantly delivering good returns. Adani group
covers more than 50 companies under it, some of them being:

10

Adani Enterprises Ltd.


Adani Agri Logistics Ltd.
Adani Agri Fresh Ltd.
Gujarat Adani Energy Ltd.
Adani Mining Ltd.
Gujarat Adani Port Ltd.
Adani Power Ltd.
Adani Retail Ltd.
Adani Wilmar Ltd.
iCall India Ltd.
Adani Properties Ltd.
Mundra Port and Special Economic Zone Ltd.
Projects of Adani Group
Mundra Port is one of the countrys first and the most efficient private port and its 100 sq km
SEZ was one of Indias largest multi-product free-trade zones. It currently handles 40 million
tonnes of cargo which is expected to go up to 100 million tonnes.
The Adani Group had entered the Power sector with its 4620 MW thermal power project in
Mundra, Kutch district. By march 2010, the first 2 units of 660MW had been completed.

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AWARDS AND ACHIEVEMENTS


The Adani Group under the leadership of Gautam Adani has been the recipient of many
awards and honors for its corporate performance. Some of them being:
It received the Dun & Bradstreet Rolta Corporate Award 2008 for outstanding
performance in Trading after the performance evaluation of over 500 companies.
Gautam was awarded the Excellence in Management Award (2007) by Chief Minister of
Gujarat.
The Adani Group's Mundra Port and SEZ was awarded the Port Authority Award (2006) by
Lloyds List for the Best Port in Middle East and Indian subcontinent.
In 2005, it was conferred as Five Star Export House and it received FIEO's Niryat Shree
Gold Trophy.
The Adani Group's, Fortune is the largest selling edible oil brand in India with a 22% market
share.
It received the ICSI award for Excellence in Corporate Governance in 2004.
It received the GCCI Export Appreciation Award in 2004.
It was awarded the International Code for the Security of Ships and of Port Facilities
(ISPS) for compliance by Ministry of Shipping, Govt. of India, 2004.
In 2003, it ranked 38th in BS 1000-Indias Corporate Giants.
In 2001, it was awarded the status of Golden Super Star Trading House as well as the
SOPA award.
In 2000, it received the SRTEPC award.
Gautam Adani owns 2 private jets, a Beechcraft jet purchased in 2005 and a Hawker
purchased in 2008.

12

PROBLEMS FACED BY THE ADANI GROUP


The Adani Group had to face stiff opposition from entrenched west-coast business rivals but still
it managed to build enough critical mass to get its companies listed on the stock exchange in
1992. The Economic liberalisation and relaxation of trade policies gave the Adani Group a much
needed boost in its expansion. In order to ensure a smooth expansion of the Adani Group Gautam
has been a generous contributor to the Bharatiya Janata Party (BJP), which is in power in
Gujarat. His business has benefited from his proximity to powerful politicians like Gujarat Chief
Minister, Narendra Modi.
Gautam Adani, the chairman of Adani Group, has faced many challenges in his 20-year meteoric
rise that propelled his company into one of Indias biggest industrial groups. Yet, the recent spate
of bad news has already shaken the confidence of his investors.
Adani, who hails from Ratan Pole in Gujarat and whose rise is one of the countrys most
spectacular rags-to-riches stories, is under attack on multiple fronts. While former Supreme
Court judge and Karnataka Lokayukta, Santosh Hegde, recently made scathing remarks about the
group over its alleged illegal mining of iron ore, its massive power project in Maharashtra is now
held up, waiting for coal allocation after coalgate. The Central Bureau of Investigation is
currently probing the matter.
Then, recently, Adanis 1,840-hectare allotment in a land-locked special economic zone (SEZ) in
Mundra was cancelled by the Congress-led Central government in mid-October over alleged
violations of SEZ rules.
To make matters worse, its Australian mining projects are facing the ire of global environment
campaigner, Greenpeace.
Consequently, Adanis investors are not a happy bunch. As of January this year, the groups
various listed companies, led by Adani Enterprises, have lost between 14 and 24 per cent of their
wealth while its debt level has risen to a staggering Rs 70,000 crore. Adani experienced the
ignominy of joining other unfortunate corporate biggies, such as Vijay Mallya, in dropping down
the Forbes Billionaires list recently. So, what could have gone so wrong, so quickly for Adani?
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The group overstretched itself and took the riskiest bets in mining. That includes the massive
$2-billion investment in Australia. Besides, there were always governance issues with the
group, says a banker requesting anonymity. The future of the group will depend on how well
Adani manages to reduce his leverage, he added.
Adani was not available for an interview with Business Standard, but, in an emailed statement,
the group said that it did not consider these roadblocks as deterrents to growth. Adani Group is
Indias leading private infrastructure conglomerate which has invested close to Rs 150,000 crore,
coupled with a huge amount of time and effort to create world-class infrstructure assets in the
resources, logistics and energy sectors, it added.
Low on power
However, a look at Adanis various projects apart from its debt load tells a different story.
The companys power projects are facing massive cost overruns, as Adani Power was prevented
by the Ministry of Environment and Forests to (MoEF) from mining one of its key coal reserves
that fell within the Tadoba tiger reserve in Maharashtra. As a result, Adani had to import
expensive coal to fuel its power plants. No wonder then that Adani Power reported a net loss of
Rs 225.4 crore for the quarter ended September this year.
The losses are expected to go up in the coming months along with the cost of new projects, say
analysts. We have revised our project cost estimates upwards by 25 per cent and 10 per cent in
the cases of Tiroda (both phases) and Kawai, respectively, and 25 per cent in the case of Mundra
(96 per cent of which is already incurred), a recent report by Amit Gulecha of Emkay warns.
Thus, we do not see upside even in a best case, but 35-40 per cent downside. We reiterate a sell
on the stock with a revised price target of Rs 30 a share, he recommends. Adani Power currently
trades at around Rs 48 a share on BSE.

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Adani says it had signed a power purchase agreement (PPA) at a competitive price with
Maharashtra and blames its misfortune on a lack of government permissions. We have coal
linkages for the rest of our projects either through import or fuel supply agreement with Coal
India Ltd. Hence, our power projects have not been affected at all by the alleged coal scam. In
addition, we have made arrangements for evacuating power by setting up large power
transmission lines from our plants to the grid. This will ensure all our plants will come on stream
on schedule and will operate at optimum capacity, says a company spokesperson.
Bumpy road in Australia
One thing is clear, Adani Group is not short on ambition. It plans to spend as much as $6 billion
in the next three years in Australia. The investments will be made in Abbot Point coal terminal
where the group bought mining rights, as well as in a railway line connecting the terminal with
the coal mines in the Galilee basin. The company plans to use the coal to fuel its power plants in
India.
But Adanis plans are met with stiff opposition from environment activists led by Greenpeace in
Australia. Greenpeace says the project will endanger Australias Great Barrier Reef due to
mining activities along it, due to increased shipping traffic in the region. Analysts fear if
environment clearances get delayed for the Australian project, it would further increase pressure
on the group, as it has taken on huge debt to fund the acquisition. The company says it will
always comply with the highest standards of environmental protection. Yet, it might not be
understanding

the

scale

of

the

problem

the Greenpeace campaign with donations.

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here,

as

local Australians

are

funding

SEZ gets scrapped


Adani, considered to be close to Gujarat Chief Minister Narendra Modi, ironically experienced
his latest setback in the latters home state. Here, the 1,840 hectares that were part of the special
economic zone project in Mundra in coastal Gujarat, were cancelled after the commerce ministry
at the Centre found the project lacked continuity. The ministry says the project was not on vacant
land, and was land-locked. The company, which already operates a tax-free SEZ nearby,
promises to reapply. As the cancellation comes just before the Gujarat elections scheduled for
December, many insiders say it was undertaken by the Congress government in New Delhi due
to Adanis political proximity to Modi.
An environment ministry committees proposed visit to the site, led by environmentalist Sunita
Narain, has been postponed till the elections are over. The committee was formed after
complaints by locals were registered on issues related to the destruction of mangroves and the
eventual changing of the topography in order to set up the tax-free zone, as well as the
companys power project. With the visit pushed to December, clearances are going to be delayed
further.
Ultimately, the key for Adanis survival will come from the way it will manage its massive loans.
The group has already overstretched itself. Now, how it manages the loans when its revenue
streams are slowing down will be the key, says a banker. It all depends on how solid the
management is.

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CONTROVERSIES SURROUNDING GAUTAM ADANI


As the head of one of the most envied corporate houses of modern India, Adani faced many
controversies throughout his life.
Gautam Adani was accused of supporting Narendra Modi at the time of the 2014 Lok Sabha
Elections. He was accused of providing Modi with special favors by providing him Adani
Groups' chartered planes for traveling to rallies across India. Clearing the allegation in an
interview with CNBC Mr. Adani said that the BJP paid market price to his group of
companies for using its aviation services. .
In 1999, his kidnapping by underworld don Anees Ibrahim became overnight headlines. He
was released for a ransom of 3 crore. Although, the reasons and other information about the
kidnapping was never confirmed.
In 2002, the Delhi police detained him for charges of cheating in a case forged by a rival.
In late 1990s, he had been under scrutiny for alleged invoicing irregularities and money
laundering. He was also charged for possible complicity with rogue trader Ketan Parekh.

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SOCIAL WORKS OF GAUTAM ADANI


The Adani Foundation
In 1996, the Adani Foundation was established in Ahmedabad to look after the Corporate
Social Responsibilities of the Adani Group.
To begin with it worked with a few rural communities around the Adani port at Mundra. The
foundation consists of a team of committed professionals whose work is to plan & implement
developmental and growth programmes in rural communities.
The team simultaneously works on a number of issues in each community to enable holistic
development.
The Foundation follows a participatory approach to ensure a sense of ownership for the
services it provides and the community wealth it creates. The Foundation, through
institutional and individual grants for education and medical relief has brought about tangible
changes in lives of people of rural communities. Today the Foundation operates in Gujarat,
Himachal Pradesh, Maharashtra and Rajasthan as a registered NGO.
The Foundation is active in four major areas for the society:

Education
Medical Aid
Rural Development
Charitable Initiatives

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Gautam Adani has created an enterprise, the Adani Group which is innovative in all aspects of
the business, from technological to commercial. He was always responsive to the concerns of
employees, society and stakeholders. He has always been a responsible citizen by trying to
harmonize all the activities of his companies with the global environment and actively working
to reduce their load on the environmental.
Today, the Adani Group is worth US$ 7.1 Billion and its flagship company, Adani Enterprises
Ltd was rated among the 50 top performing Asian companies by Forbes magazine. The combined
market capitalization of 3 of its listed companies - Adani Enterprises, Adani Power and Mundra
Port and Special Economic Zone have put the group among Indias top 10 business houses.

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1.2 Dr. KALLAM ANJI REDDY

(01 February 1939 15 March 2013)

He was an Indian entrepreneur in the pharmaceutical industry, the Founder-Chairman of


Dr. Reddy's Laboratories, which he established in 1984,
Chairman of Dr Reddy's Foundation (DRF),
The corporate social responsibility arm of the group, established 1996.

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Earlier Life and Education


Dr. Kallam Anji Reddy was born in a village near Vijayawada in Andhra Pradesh state of India.
He was very aspirational boy who always dreamed big in life. In his village, his father was a
farmer growing Turmeric, and Anji never wanted to be like him. Rather he would want to be
someone rich and famous.
After graduating from the Annapotanna Bold High School. Reddy went on to get his first
Bachelor of Science degree from A.C. College at Guntur in 1958.He studied hard while nurturing
his dream of making big in life and got his Bachelor of Science (B.Sc) in Pharmaceuticals and
fine chemicals from Bombay University. He did his PhD in Chemical Engineering from National
Chemical Laboratory, Pune in 1969. Having acquired right qualification and with the attitude of
a winner, he started his career in Indian Drugs and Pharmaceutical Limited (IDPL) a
government of India undertaking company to research on new drugs.
He worked in IDPL till 1975 and set out to start his own company Uniloids in 1975. The reason
behind starting Uniloids, he claims was that at that time India was importing huge quantity of
drugs and vaccines from abroad. If he could perfect his homegrown technology and produce
some of the products right in India, he could make a killing and that too at one-tenth the cost.
Establishment of Uniloids.
The drug that he produced first was Metronidazole, which was better than the Italian product that
India was importing at that time. His success in making his product better than the innovator
itself and that too at very low cost made national headlines. He became instantly famous and
made tonnes of money. This gave him tremendous confidence, which propelled him to move
forward into newer areas. Later he also succeeded in making Sulphamethaxazole of higher
standards, making it superior to even imported one.

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Dr. Kallam Anji Reddy


This is a story of a small boy and his larger than life Aspirations, how he turned them into reality
despite being born into a poor farmers family in a remote village of Andhra Pradesh.
The man who changed the face of Pharmaceutical Industry in India, and transformed his
company Dr. Reddy Laboratories (DRL) from a mere US$ 50000 (Rs. 30 Lakh) startup to over
US$ 2.1 billion (RS. 12,500 Crore) global conglomerate.
India, in 1960s had severe problems with respect to healthcare. None of the lifesaving drugs and
vaccines were being produced in India, as they required proficiency to do so. International
pharma companies were not eager to help India with their knowhow as India had not ratified
product patent law International Pharma companies wanted their entire products patent protected
through laws in India. Passing the product patent law meant; no other company could ever make
similar products even if the ingredients and the process to make the products were different. That
means whatever the original patent holder charges, patients had to pay with no other alternative.
This would push the cost of drugs sky-high and India with substantial number of very poor
people could not afford to buy those drugs. Importing the drugs and vaccines from developed
countries like USA and Europe meant foreign exchange (forex) outgo which was dead scarce
those days. So, India without any other option had to pass patent laws that recognized only the
process used to make drugs. That means, there could be any number of competing products in
the market so long as makers use different process to produce them.
This triggered competition resulting in falling of drug costs, which in turn triggered efficiencies
in producing, marketing and distribution of the drugs. An entirely new industry was born where
in the players reverse engineer the patented original product and produce would copycat drugs.
Such drugs are called generics in Pharma lingo.
That was how Indian Pharma Industry worlds third largest in volume and 13th largest in dollar
value as of 2013, was born in early 1970s. From simple headache pills to some of the most
complex drugs to treat neurological disorders, cancer, HIV/ AIDS etc. are now made in India.
They are sold at a throwaway price when compared to what original inventor charges them in the
west.

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Though India is known to the world for its strides in Information Technology (IT) industry, but
what is relatively unknown is the fact that its real strength lies in its pharmaceutical industry. The
kind of innovation and technological advancement that has happened in Indian Pharma Industry,
Indian IT industry is yet to see it.
Consider this. India has second highest number of FDA (Food and Drug Administration) of
America approved pharmaceutical companies in the world, which supply pharma and pharma
ingredients to America. Most of the big Pharma MNCs around the world source their drugs and
pharma ingredients from India. This talks about the quality and the process perfection Indians
have achieved in the Pharma industry to produce highest quality products at lowest possible
rates. Not only the advanced countries are benefiting by importing high quality- low priced
pharma Ingredients from India, even the poor nations too are benefiting. The reverse engineering
capabilities of Indian pharma companies has brought tremendous accolades from poor and
developing countries.
To know more about how Indian pharma industry is helping poor countries, read on
Indias CIPLA pharma is selling HIV/ AIDS drug in Africa at one-tenth the cost of branded drug,
which is at US$150 per year. Africas over eighty percent of the entire AIDS drug requirement is
met from India. Likewise, NATCO pharma produces and sells Cancer drug at US$ 152 (Rs.
9600), while its original innovator has priced its Cancer drug Gilvec at US$ 2400 (Rs.
1,20,000) in India*. Similarly Bayer Corporation of Germany has launched its rare Renal Cancer
product at US$ 5600 (Rs. 2.8 Lakh). On the contrary, one of the Indian pharma companies has
launched its generic version at a price of US$ 160 (Rs.8000)*. Pfizer sells its innovator sutent
drug to treat Kidney and GE cancer at US$ 3920 for a 45- day course, while an Indian company
has launched its generic version at US$ 392 (Rs. 19,600)*. Roche Pharma Company has
launched its Hepatitis C drug to treat Pegasys at US$ 8720 (Rs. 4.36 Lakhs) for a 6 months
course. An Indian company has produced its generic version and sells at US$ 943 (Rs. 47,160)*.

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There are several such stories narrating how Indian pharma companies are helping the world
keep its health-care cost low. In fact India is increasingly seen as pharmacy of the worlds poor,
as it has perfected the art of producing low cost high quality generics versions of some of the
most complicated and expensive drugs. However there have been heated arguments between the
proponents of patented and the generic drugs, but generally people are of the opinion that
between profits and humanity, companies should uphold humanity. That is exactly the point of
Indian generic manufacturers and they claim that inspite of doing cutting edge research to
produce generics, they are still making profits even while selling at such low prices.

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Contribution of Dr. Anji Reddy to the Indians pharma Industry.


He along with Yusuf Hamid of CIPLA and Parvinder Singh of Ranbaxy - the trio known for their
courage, conviction and vision, are the pioneers of the Indian pharmaceutical industry who put
India on the global pharmaceutical map. They took Indian Generics products to the west the
cradle of innovative drug industry, and started selling there on equal terms. Also, the trio can be
said to have brought in the Indian pharma industry the mentality to look beyond reverse
engineering the patented drugs. They themselves started researching into innovative drugs and
have made good strides in that area and will soon achieve major breakthroughs.

Mr. YUSUF HAMIED

Mr. PARVINDER SINGH

CEO of CIPLA

25

Establishment of Dr. Reddy Laboratories (DRL) And Beyond


In 1985 he started DRL, created a scarce drug, 'Methyldopa a drug used as antihypertensive,
and raked in enough profits. The story goes like this: Although international manufacturer Merck
had its own Methyldopa, its Indian subsidiary had no access to it. Reddy approached Merck US
based Pharma MNC, with his samples of the drug but was rejected almost immediately citing the
quality issues. Though Merck had tie up with Tata group in India back in mid eighties to import
and sell Mercks Methyldopa in India, government of India did not allow doing so because of the
cost was prohibitively high. So the Indian government asked Merck to import the same from
Hungary at a low cost. The quality of Hungarian Methyldopa would not pass through the
specification of Merck. The situation remained that way for sometime till Dr. Reddy took it as a
challenge on himself and produced Methyldopa using his own process and technology that not
only matched Mercks specifications but exceeded it. Thus Merck started sourcing the product
from him to sell it all over the world. With a series of excellent products made available at
affordable cost,
Dr Reddy's Labs found its foothold as a strong pharmaceutical company. 20 years later, the
company became India's number one pharmaceutical player. FDA Approvals: In 1987,
Dr. Reddy saw to it that FDA of America certified his manufacturing plants in India and it was a
big achievement for him. This is because; FDA approves only those manufacturers whose
manufacturing infrastructure and the process used to make drugs adhere to stringent International
quality standards. By bagging FDA approval, Dr. Reddys products got direct endorsement of
quality and reliability. The news about Dr. Reddys accomplishment in generics and the
subsequent FDA approval made headlines in international finance dailies. As a result, he got
enough visibility among his peers across the globe.

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Dr. Reddy eventually started exporting his products to some of the quality conscious big daddy
Pharma companies around the world. By the end of 2012, he got FDA approvals for all his plants
in India. In 1989 Dr. Reddy launched an in-house developed generic version of the drug
Ciprofloxacin An anti-bacterial drug to treat respiratory, urinary tract, gastrointestinal, and
abdominal infections. This product made waves in the Indian pharmaceutical Industry, as there
was no similar product available and demand was huge at that time. The situation remained that
way for four years, and Dr. Reddy reaped good fortune at that time too. Listing on Indian stock
exchanges: The early nineties also saw DRL getting listed on Bombay Stock Exchange (BSE)
and National Stock Exchange (NSE) of India.
When the Ciprofloxacin driven sales boom was happening for four years, Dr. Reddy rewarded
handsomely to his shareholders. Consider this. He gave one bonus share for every two shares the
very first year. The second year he increased it to one bonus share for every share and the third
year, he gave two bonus shares for every share. That is how he became the darling of the stock
market in 1993 and his move was much appreciated. International Expansion: By early nineties,
Dr. Reddy had already learnt the ropes of making generic drugs and selling in India. Now he set
his sight abroad to expand his business there. In 1992, he tied up with Biomed of Russia to start
manufacturing plant there. He followed it up with similar tie-up with a Middle Eastern company
to start two formulations plants there.
Also in 1994 he made a big-bang announcement by starting a formulation plant in USA. Dr.
Reddy exported bulk drugs from India to all these plants, and convert them into final generics
products, and later sold them to these Pharma companies there. That is how he became serious
international pharma player by being successful at this endeavor.

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Initiatives Taken For New Drug Discovery


Though Dr. Reddy pioneered the art of making generic version of patented drugs; he never was
just content with it. He wanted to raise the stature of his company - DRL to that of a big Pharma
MNC, and for that to happen there was no shortcut way than getting into new Drug Discovery
(NDD). Thus Dr. Reddys tryst with NDD began in early nineties, and this move of his was a
groundbreaking initiative that was hailed by everyone in the industry. His entry into the world of
NDD gave him unique identity which separated DRL from me too sort of pharma companies
in India. To begin with, Dr. Reddy invested heavily in building R&D labs apparently DRL is
the only Indian company to have significant R&D being undertaken overseas. Dr. Reddy's
Research Foundation was established in 1992, dedicated to research in area of NDD.
Focus of these labs has been to do innovative R&D by hiring new scientists, especially the
Indian students studying abroad on doctoral and post-doctoral courses. In 2000, the Foundation
set up an American lab in Atlanta dedicated to discovery and design of novel therapeutics. The
lab is called Reddy US Therapeutics Inc (RUSTI) and its main aim is the discovery of next
generation drugs using genomics and proteomics. Reddy's research thrust was focused on large
niche areas in western markets anti-cancer, anti-diabetes, cardiovascular and anti-infection
drugs. As a result of this effort, by 1997 DRL became first Indian company to out license an
anti-diabetes molecule to Novo Nordisk, a Danish Pharma MNC, to do commercial trials for its
newly discovered molecule.
Dr. Reddys this move raised the prestige of DRL from just a copycat pharma company to a
research driven one among the investor community. However things did not go as expected
during the phase III of the commercial trails some issues cropped up pertaining to side effects,
and the trials were stopped. Had the trials been successful, the credit would have gone to DRL to
produce such a block buster molecule and Dr. Reddy could have earned royalty in millions of
US$. But this is how the R&D in Pharma Industry works and is considered as a part of the game.
Research into NDD is very risky affair and is well known to all the players. The pharma
companies usually get mentally and financially ready for any eventualities before they even
plunge into it. However at DRL, scientists are still vigorously working on various chemicals to
somehow produce a wonder molecule that can produce a drug one day to treat human ailments.

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Listing on New York Stock Exchange (NYSE)


Dr. Reddy sensed that in order to make DRL an international company he has to play
international. Though developing newer technologies in-house is difficult and time consuming,
acquiring companies that have them is easy and fast. For that he needed money, and he made the
right move by making DRL list on the New York Stock Exchange on the April 11, 2001. The
issue was dubbed as the year's best performing American depositary receipt, or ADR. It fetched
DRL $133 million at a time when stock markets across the world were at their lowest end. He
used these funds to acquire two pharmaceutical firms - BMS Laboratories and its subsidiary
Meridian UK in the United Kingdom (UK) to have a foothold in Europe. These companies had
good technologies but were making huge financial losses; so outright sellout made sense to them.
Dr. Reddy aligned the newly acquired companies with that of DRLs business requirement. Later
Dr. Reddy started Bio Technology venture in India to capitalize on the craze for biotech
products and services in 2000. Also with the ADR funds he started a venture, Auriegene
Discovery Technologies (ADT), a contract research company in 2002. Auriegene's objective was
to gain experience in drug discovery through contract research for other pharmaceutical
companies. Also, he started the Institute of Life Sciences (ILS). This institute is focused on the
interface between life sciences and chemistry. Here, chemists and biologists work together to
seek solutions to human health issues.
The model is to create its own intellectual property and commercialize it in collaboration with
the industry. DRL, ADT and ILS have some of the best R&D labs in India on par with the ones
found in the western world, doing cutting edge research work. Dr. Reddy proudly says his
companies employ hundreds of world-class scientists to carry out futuristic experiments and they
are happy too.

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This Was a Clear Purpose Behind Dr. Reddys Accomplishments.


The purpose could be seen not only in the later part of his life but also during his education days.
He did his masters and doctorate degree course in chemical engineering with the purpose to
make it big in chemical industry, and he did exactly that. In the early seventies when most of the
educated Indians wanted to be in safe government jobs, Dr. Reddy quit his government job at
IDPL to start his own venture. This move of his talks about the fire he had in his belly to make it
big in life on his own, as the slow pace of life at IDPL might have made him impatient, and must
have driven to look for opportunities elsewhere. He was fantastic in assessment of opportunities
in the market and he could do it earlier than others and was also good in cashing in on. Back then
when MNC pharma companies were importing essential drugs and were selling at a premium in
India.
Dr. Reddy could produce those drugs that met the specification of original patent holding
companies at much lower costs. Sometimes, they (the companies) used to source from him as it
used to be very economical for them. Though almost all the Indian pharma companies were
making money from reverse engineered drugs, he was not content just doing that.
This was how Dr. Reddy built his empire brick by brick from almost nothing to over US$ 1.5
billion dollars multinational conglomerate. His fire to succeed, passion at what he was doing,
ability to think ahead of others and the strong purpose behind his work has brought DRL where it
is today. By the end of 2012, the company had operations in thirty countries making it as diverse
as any big global Pharma major. In three decade of its inception, DRL became one of the most
sought after companies for job seekers, investors and others. So, looking at all these
achievements, one can clearly know what kind of big dream or ambition Dr. Reddy must have
nurtured in his childhood days, and now we know why he never got into the turmeric farming
business as his father did in the first place.

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He Had A Grand Vision For His Company DRL


To help people lead healthier lives, and this required his company to be much more than just a
mere copycat drug maker. When every other Pharma company in India was content making and
selling generic drugs to Indians, Dr. Reddy thought of selling drugs in high margin, highly
regulated and quality conscious western markets America, Europe and Japan. This was
because, for DRL to grow he was needed money and Indian market wasnt giving him enough
returns, so he set his sight on those foreign markets. However selling there was not easy and
required sprucing up his manufacturing infrastructure and the processes to the international level.
This was very expensive affair not everyone could afford. Also any failure in getting FDA
approval might lead to negative publicity, which would affect his company DRLs carefully builtup image. Consequences of failing would cost Dr. Reddy dear. But for him, nothing would stop
once he decided to do something. When his well thought out goal was set, he would meet it no
matter what it took, and that was Dr. Reddy to the world A modest, hardworking and intelligent
man with big ambitions.
For Dr. Reddy, FDA approval was like manna from heaven, as DRLs international journey
began with that. His purpose to get FDA approval and later to supply ingredients and drugs to
foreign companies was to boost DRLs image internationally and earn good profits. Having done
that, Dr. Reddy was now ambitious to go beyond bulk drug supply to innovate and invent new
drugs. Though he was short of technology, he was sure that he could acquire them by buying a
few financially ailing Pharma companies in Europe, which had cutting edge technologies. But
that required funds and he raised it by listing DRL shares on New York Stock Exchange. The
money so raised, Dr. Reddy used to acquire companies and open manufacturing sites in Europe,
USA and Middle East. He set up state-of-the-art research laboratories in India and USA to do
R&D work on NDD.

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This was how Dr. Reddy slowly and steadily brought the change in the profile of his company
DRL from a copycat generics drug maker to that of an innovator. Though Dr. Reddys first swipe
at NDD was partially successful, but the ball has been set rolling, as his young team at DRL is
ever enthusiastic to discover new drug molecules and is confident that they would crack it sooner
than later. When the accomplishments of Dr. Reddy are considered, one would get a feeling that
he was haste in deciding things. This is because it appears that he took many risks and survived
because of mere luck. However the fact is that, every move of his was preceded with thorough
evaluation of the same with clear objectives. He only went ahead once the proper ground had
been built. By this he showed to people how one can keeping progressing in spite of all hurdles
and it works as long as one has planned ones move properly.

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Dr. Reddys Service to the Society


Though Dr. Reddy is considered as one of the pillars of Indias modern Pharmaceutical industry,
his philanthropically work to help the underprivileged people has been less reported in the
media. It looked like as if he wanted it that way.
Some of his works are listed below.
NAANDI FOUNDATION: He spent a bulk of his earnings to fund initiatives to alleviate
hunger, create livelihoods, provide education and access to safe drinking water and pull back
children from hazardous industries through his not-for-profit organization Naandi Foundation.
He has set a target of transforming a million lives by the end of 2020.
DR. REDDYS FOUNDATION: Dr. Reddy founded Dr. Reddy's Foundation in 1996 to create
livelihoods to poor people. Its initiative, called Livelihood Advancement Business School or
LABS, has, so far, trained over 130,000 youngsters with skills suited for entry-level jobs in
sectors such as hospitality, Information Technology enabled Service (ITES) and customer
relations.
SPARSH: Dr. Reddy also launched a social initiative called "Sparsh," an assistance program for
cancer patients who cannot afford a treatment. Patients identified by the doctors through Sparsh
are provided Reditux, the anticancer biologic drug from Dr Reddy's Labs free of cost. He
rendered a lot of help to cancer patients so that their suffering would come down.
LV PRASAD EYE INSTITUTE: Dr. Reddy has committed a huge amount of fund for over 10
years that will make the L V Prasad Eye Institute self-sustaining. LV Prasad Eye Institute does a
lot of free and subsidized eye treatments. The institute is the only one in India and one of the few
in the world that uses stem cells for corneal reconstruction. It has treated over 500 such cases
over the last five years, the highest anywhere in the world. In a freewheeling interview he quoted
as follows I am happy that, throughout the growth process, our company has never forgotten the
basic reason for its existence. That is to provide affordable and innovative medicines to patients
across the world. And that it has the-strategy to leverage research and development, product
offerings and customer services to be a leading global pharmaceutical company, (source: Bio
Spectrum Asia www.biospectrum.com, 19 March 2012)

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AWARDS
Dr. Reddys contribution to the Pharmaceutical industry has been recognized and awarded
profusely by the society. Till 2012 he was a member of the Indian Prime ministers council on
Trade and Industry, which talks high about the recognition and faith that the Indian leadership
team had on him. A few of the awards have been listed below.
Lifetime achievement in health award in 2012 at Asian Voice Political & Public Life Awards
ceremony at London for his lifetime commitment to medical research for improving the lives
of people.
Padma Sri and Padma Bhushan awards from Government of India in 2001 and 2011
respectively.
Sir PC Ray Award in 1984
Chemtech foundation Hall of fame award in 2005.
Lifetime achievement award at IBLA India Business Leadership Award ceremony event
held in 2012.
Dr. Reddy lived a king sized life and always engaged himself with some activity or the other till
he breathed his last on 15-March-2013 at the age of 72. Though he is no more, he has drawn up a
roadmap for people to bring success in life. He exhorted everyone to dream big and aspire bigger
in life, thats when one can do big things in life.

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K ANJI REDDY: I WANT TO BUILD A COMPANY THATD


LAST 500 YEARS
As clichd as it may sound, passing away of K Anji Reddy marks the end of an era. Along with
YK Hamied and Bhai Mohan Singh, Dr Reddy defined and built the Indian pharmaceutical
industry that we know today.
He was a rare combination of a great scientist, entrepreneur, philanthropist and a humanitarian.
Passionate about science, compassionate to the core and a true practitioner of giving, says Dr
GN Rao, founder of LV Prasad Eye Institute in Hyderabad, whose own philanthropic efforts at
LVP was touched and amplified by Dr Reddys help.
A first-generation entrepreneur who left a public sector job to start Dr Reddys Laboratories in
1984, Anji Reddy took the word Laboratories very seriously and pursued his passion of drug
discovery till the end. He had set up a lab in his grape-garden and would tend to it every day.
Drug discovery is like an addictioneveryday something doesnt happen but the day you have
a dramatic result, you feel that theres something that could change the way people live. That
gives you the real kick, he said.
The last I spoke to Dr Reddy was in October 2012. I was writing this story on Ciplas YK
Hamied and wanted his perspective since he had started his business with projects from Cipla
and had shared a relationship with Hamied that lasted 35 years. Even though he wasnt keeping
too well he agreed to chat. Talking about Hamied is like having tonic, I feel good, he said, with
a hearty laugh. In fact, there was even a tinge of regret Hamied was older than him but in much
better health. When we recently invited Dr Hamied to inaugurate our R&D Lab in Cambridge,
he himself drove down from Londonhe is so healthy, he said.
Dr Reddy had a fascination for drug discovery. In 1993, DRL became the first company to set up
a dedicated R&D center and he recalled how within first 2-3 years he licensed three molecules to
big pharma. Several years later and even after stepping down as chairman of the company, he
remained passionate. Making one more generic drug doesnt give me any kick, he said.

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Once when he was traveling to London, cine star Amitabh Bachchan was in the same flight, who
incidentally had a co-passenger who snored. The next morning, Bachchan came up to him and
said, Dr. Reddy, why dont you discover a drug for snoring. Dr Reddy, who was moved by
Bachchans performance as an Alzheimers patient in the movie Black, said, I dont have a drug
for snoring but I am working on a drug for Alzheimers.
Dr Reddy put his personal money behind this drug research. It was supposed to enter phase I
trial two weeks later. We hope the drug trial marches ahead but even if it fails, itd fulfill his
dream of failing gloriously.
He was indeed very passionate about drug discovery and very proud of the many projects that
the company had, says Dr Rao. He always told us that scientists should never have to face
resource constraints. He is one of the few Indian philanthropists who supported research with his
personal funds.
Perhaps Dr Reddy understood that a solid R&D foundation can sustain a company for several
generations by continually adding new products to the pipeline. He admired the book, Built to
Last and wanted to nurture his company just like the American family built Merck. I want to
build a company thatd last 500 years, Merck is 640 years old, he said.
So serious was he about following Merck that when DRL struck a deal with the multinational for
a monoclonal antibody, Dr Reddy hosted the head of the family of the 13 th generation and got his
own family to know the history of Mercks family organization.
In many ways, with DRL, Naandi Foundation and other charitable activities, Dr Reddy has left
an enduring legacy. He was anguished by the muddled regulatory and legislative environment
from clinical trials to price controls. The industry that has brought so much recognition to the
country is threatened every day
For an entrepreneur who wanted to create a Merck in this country, we hope the industry
tribulations are just a passing phase!

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BIBLOGHRAPHY

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