Last week, Mr. Dilip Sanghvi displaced Mr. Mukesh Ambani, the Chairman of Reliance Industries, as India’s richest man. Sanghvi’s net worth was estimated at about INR 1.39 lakh crore (approximately USD 22.5 billion – Forbes real time net worth as on 11 March 2015) vis-à-vis Ambani’s net worth of about USD 19.5 billion (Forbes real time net worth as on 11 March 2015). The Forbes business magazine published its annual list of the world’s richest folks a few days ago, and Ambani was ranked the richest Indian for the eighth consecutive year. Within a couple of days of this development, the stock prices of Sun Pharma and Sun Pharma Advanced Research Company (SPARC) bounded up to record highs leaving Forbes to change its real time rankings. Other Indians who feature high on the Forbes list are Mr. Azim Premji, Chairman Wipro Industries, with an estimated net worth of USD 18.8 billion (Forbes real time net worth as on 11 March 2015), Mr. Shiv Nadar, co-founder of HCL group whose net worth is USD 15.1 billion, and Mr. Lakshmi Niwas Mittal, Chairman and CEO of ArcelorMittal, whose net worth is about USD 13.4 billion.
Route to Riches
Dilip Sanghvi can truly claim to be a self-made man. He started off with a tiny pharma drug manufacturing company in the year 1983. Through the 1980s and 1990s, Sanghvi steered clear of competing with domestic and international giants in terms of manufacturing and selling high revenue anti-infective drugs which had a dominant market in the country. Instead, he concentrated on taking advantage of the patent regime by carving a niche for himself in manufacturing speciality drugs for cardiovascular ailments, psychiatry, oncology, dermatology, and neurology. He chose to maximise margins and operating profits in these less competed drugs while at the same time building a robust sales network and focusing on strong brand and pricing strategy. He used mergers and acquisitions as a tool to grow fast and tap into the American and European markets. With a global decline in infectious ailments and a sharp rise in lifestyle diseases, Sun Pharma soon became a global pharma giant.
SPARC was founded in 1993 as the country’s first pharma research and development centre and became the only R & D company listed on Indian exchanges at that time. In 1994, Sun Pharma went on to be listed on the Indian stock exchanges and the IPO offering was oversubscribed 55 times. Sanghvi’s Sun Pharma has hitherto acquired 16 companies including Caraco Pharma in the US, Taro Pharma from Israel, and Ranbaxy in India. The share value of Sun Pharma has jumped about 46 percent since its listing. The share closed at INR 1010.70 at the BSE on 11 March 2015. Sanghvi has been lauded as one of the most enterprising businessmen that the country has produced till date.
Academic Background and Early Life
Sanghvi spent the greater part of his childhood in Kolkata (then Calcutta). He studied at the J. J. Ajmera High School and went on to earn a Bachelor of Commerce degree from the University of Calcutta while studying at Bhawanipur Education Society College. He started his career as a pharma drug distributor in Kolkata. His interest in reading pharmaceuticals research papers spurred him to set up his own enterprise and turn into a manufacturer. In 1983, Sanghvi ventured into pharma drug production with a meager capital of INR 10,000. He hired two people to market the five psychiatry drugs and capsules that he started to manufacture in a small unit at Vapi, Gujarat.
Dilip Sanghvi is a first generation entrepreneur born in 1955 into a Jain family from the Gujarati town of Amreli. About 25 years ago he met Vibha, a vibrant young woman whom he courted and later married. Dilip and Vibha have two children – Aalok and Vidhi. Aalok, who now heads international marketing at Sun Pharma, is currently being groomed to take on a senior position in the organisation. He studied at the University of Michigan and worked his way up from the position of product manager that he took on in 2007. Like his father, Aalok is also reported to be a media-shy person. He is married to Karishma Mehta whose family owns Deepak Fertilisers & Petro-chemicals Corp. Vidhi is a Wharton graduate and is also working with the organisation. Dilip Sanghvi is reported to be a voracious reader who loves J K Rowling’s fantasy fiction and eating south Indian food at Mumbai’s local joints. Reticent and somber, Sanghvi hates to travel but is often found taking long business trips. He now lives in Mumbai, Maharashtra.
Sun Pharma – Brief Profile
Sun Pharmaceutical Industries Limited, headquartered in Mumbai, is now a multinational pharmaceutical manufacturer with over 1000 products and 14000 employees worldwide. It is the largest pharmaceutical company by market capitalisation in the country (INR 2.08 lakh crore) and owns about 26 manufacturing units in India, the US, Canada, Brazil and other countries. The company has a net income of over INR 56.6 billion (2013-14) and Sun Pharma’s acquisition of Ranbaxy in 2014 is likely to make it the biggest pharma company in India. It also plans to acquire Suzlon Energy (owned by Tulsi Tanti); these acquisitions will make Sanghvi’s net worth considerably higher than at present.