It was 1988. I was at a Sunday lunch at Sudhir Merchant’s house when solicitor RA Shah casually mentioned that Australian MNC Nicholas Laboratories wanted to sell its operation in India. Right there, I made up my mind. On Monday, my bid reached the Nicholas group.
I knew nothing about the pharma business, just that the family once had a drug store. Kemps Corner not only housed a retail store but also a pharma business, which Dad had bought from Kemp & Company. Eventually, we had to shut it down because we couldn’t run it successfully but we kept the retail space. I didn’t realise it then, but pharma needs manpower for promotions and sales. You need medical representatives to go and call on doctors. Even if you have a Rs.20 crore turnover, you need 100 people. In textiles, you can make Rs.100 crore with just five people.
The Nicholas acquisition was pure serendipity. There were several others in the game — some who bid more than us; an investor who owned 10% in the company and had served on the Nicholas board; the top management, who had the backing of a financier to take over. We really stood no chance but ended up inking the deal! Of course, Nicholas had initially signed the deal with Reckitt & Colman. The latter backed out after they realised Nicholas had certain contingent liabilities on account of an excise duty dispute. We did an estimate, got the lawyers in, who said it was unlikely the liability would materialise.
When you are putting in money as an entrepreneur, you look at the pay-off and take the risk. As a professional manager, you worry about a hundred things. I remember the meeting with Mike Barker, who was responsible for making this deal happen. I told him that all I have is a dream, an impossible dream to make Nicholas among the top five pharma companies in India. It was ranked 48th at that time. I don’t know why I said something so audacious. I don’t know if Barker got impressed by my ambition or my sincerity, but he did. We shook hands.