Desh Bandhu Gupta: The humble professor
“I have
never looked at numbers. Numbers are just an outcome of the work done,”
Desh Bandhu Gupta, the founder chairman of pharmaceutical company Lupin, had
told Forbes India during an interaction in October 2016. The self-made
billionaire passed away in Mumbai on June 26 at the age of 79.
Gupta’s professional life is a testament to
what a hardworking, first generation entrepreneur can achieve, and benefit
society in the process. The legacy that Gupta, fondly known as DBG, has left
behind is the world’s fourth largest generics pharma company by market value
and sixth largest in terms of sales, which earned $2.55 billion in revenue in
FY17.
To think that Gupta, who was born in Rajgarh,
Rajasthan, founded Lupin in 1968 with Rs 5,000 that he borrowed from his wife,
shows the long and successful journey he traversed from being a professor of
chemistry at the Birla Insitute of Technology and Science, Pilani, to becoming
India’s 20th richest person with an estimated net worth of $5.1 billion
(according to the 2016 Forbes India Rich List).
Gupta’s philosophy towards business is best
exemplified by the rationale with which he named his company Lupin. The name
draws reference from the Lupinus flower, which is known to nourish the soil in
which it grows. With a disarming smile, humility and knowledge of chemistry (he
holds an MSc degree in chemistry) as his biggest assets, Gupta founded Lupin as
a manufacturer of vitamins, but the desire to serve a larger, social cause saw
Lupin transition into manufacturing drugs to combat tuberculosis (TB), an
infectious airborne disease that has claimed millions of lives in India over
the years. Lupin persisted with the manufacture of anti-TB drugs for the
domestic market despite the fact that it was a low-margin business, with drug
prices largely controlled by the government.
In fact, Gupta was a contrarian in the sense
that he believed that the prices of certain essential drugs needed to be
controlled by the government, says Habil Khorakiwala, chairman of Wockhardt,
who knew Gupta for four decades and called him a “competitor and a friend”.
In the late 80s and early 90s, Khorakiwala
and Gupta were part of a committee formed to deliberate on drug policy, which
comprised industry leaders such as themselves and bureaucrats. “We had a
different perspective of the industry. His (Gupta’s) view was that some amount
of price control was required, whereas my belief was that there is enough
competition in the industry to let prices find their own level,” Khorakiwala
recalls.
While the focus on manufacturing drugs that
were of relevance to India continued on one hand, Lupin also expanded into new
therapeutic areas, including complex generics and specialty drugs across
cardiovascular, diabetology, asthma, paediatrics and gastrointestinal-related
disorders, among others, and global regions like the US, Europe, Latin America
and Japan.
DBG’s concern for social issues wasn’t
restricted to making anti-TB drugs alone. Much before it became mandatory for
Indian companies to spend a portion of their earnings towards corporate social
responsibility measures, Gupta had pioneered the foundation of the Lupin Human
Welfare and Research Foundation in 1988. Through the foundation, Lupin works
across 3,463 villages across India for their economic, social and
infrastructure development, impacting 2.8 million families.
It isn’t as if Gupta didn’t make mistakes and
some of the calls he took didn’t work out as planned. But while it isn’t
uncommon for entrepreneurs to err at times, it is the determination with which
they bounce back that distinguishes them. In Lupin’s case, an unrelated
diversification into real estate in the 1990s didn’t augur well for the company
and left it saddled with a mountain of debt. The singular focus on India also
meant that peers like Cipla and Ranbaxy made headway in the foreign markets.
To pare debt, Gupta sold a portion of his
stake in Lupin to CVC International, a Citigroup company in 2003 and the new
investors wanted a managing director to be brought from outside to bring the
company back on track. While the induction of an external professional for the
top job at Lupin may have been at the behest of investors, the freedom that
Gupta granted to Kamal K Sharma to steer the ship saw the foundation of Lupin’s
future growth, and a deep bond of friendship, being laid.
What followed was a twin process of balance
sheet repair – aided by strict control on costs – and focus on research and
development, which aided Lupin’s successful entry into developed markets like
Japan and the US.
Sharma hung up his boots as Lupin’s MD after
a decade in 2013, and made way for Gupta’s children – Vinita Gupta and Nilesh
Gupta – to assume responsibilities as chief executive officer and MD
respectively. He, however, continues as the company’s vice chairman and
commands the same respect as Vinita and Nilesh.
While Vinita and Nilesh took the company on
an aggressive and inorganic path of growth, Gupta and Sharma continued to be
the sounding board for all major decisions, especially those related to mergers
and acquisitions. “He (Gupta) ensured a
great combination of professional leadership and entrepreneurial spirit and
risk-taking ability in the organisation,” Khorakiwala said, and added that
it was due to entrepreneurs like Gupta that the Indian pharmaceutical sector
had become a globally competitive force to reckon with.
“With
his passing away, India and the pharmaceutical industry has lost one of its
tallest leaders,” Khorakiwala summed up.
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