Ameera Shah | Diagnosis: a risk-taker
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Ameera Shah laughs when I ask her how much her firm, Metropolis Healthcare, is worth. We are at Le Pain Quotidien in the Bandra-Kurla Complex, Mumbai. It’s halfway between Shah’s home on Altamount Road, where she lives with her two dogs, Ginger and Lilo, and her office in the suburb of Kurla, with its 40,000 sq. ft diagnostics lab. The 37-year-old isn’t shy of numbers—she tells me she took over her father’s diagnostics lab in 2001 and has grown it a hundredfold, from sales of Rs7 crore to over Rs700 crore.
This is no small feat and Shah has done it by building a team that grew the business as well as a slew of acquisitions—25 in these 16 years. But she’s wary of valuations. And no, it’s not because the sole investor, the private equity firm Carlyle Group, will object—if they do disagree, it is about the usual things all investors disagree on, such as whether to go for an IPO. She says they are happy with the growth of the company.
She is amused by discussion of her company’s valuation (last estimated at Rs5,000 crore) because every time her company valuation appears in the media, she is swamped for days with hundreds of Facebook friend requests. “You know what the most searched-for string on my name often is? It’s Ameera Shah husband,” she says.
Shah is the only non-doctor in a family of doctors. Father Sushil Shah is a pathologist, mother Duru Shah is a well-known gynaecologist and elder sister Aparna, who lives in Texas, is a geneticist. But Shah decided early on to go the finance way, studying commerce at HR (Junior ) College in Mumbai university and graduating in finance from the University of Texas in 2001. “Every graduate in the US has the same two dream jobs—working on Wall Street or working with a consulting company like McKinsey & Co., and I was the same.”
An internship with Goldman Sachs proved disappointing for the 19-year-old. “I quickly realized big companies were not my thing. And the idea of making money without creating anything, and being driven only by making more money every day was depressing to me.” After she finished college, she joined the Texas-based technology and people start-up Talenthill, where she discovered a fondness for small companies—“I felt that every day I was at work, my presence mattered.”
It was around this time that Shah read Bangladeshi microfinance guru Muhammed Yunus’ Banker To The Poor. She was tremendously influenced by the story of the economics professor who had returned to his country in the early 1970s and set up a successful microcredit business for female
entrepreneurs. The book would mark the start of Shah’s interest in entrepreneurship, female entrepreneurs in particular.
“Entrepreneurship in India is anyway hard,” she says—for women, it becomes that much tougher because people rarely back them with money, or give them the first contract. Women are never encouraged to take risks. “If there is a guy, they say go for it, for a girl, they say, how will you manage, you have a family, a kid, you want to do this also, it’s too much. Give up something—give up work.”
Shah challenges such attitudes. “I have had love in my life and at the same time I have been building my business. There’s nothing that stops me from having children if I choose to, or from being married. I don’t believe you have to give up one thing or the other. I think you can balance it.” But then Shah has always been a risk-taker. Her career has seen a big buyout deal, a boardroom battle and multiple acquisitions.
We order lunch—Shah knows what she wants, and is brisk with her order of chilli lime basa fish. That done, we talk about 2014, when Metropolis investor Warburg Pincus wanted to sell its 27% stake in her company. Diagnostics is a profitable and growing business, but nobody wanted to buy a stake in Metropolis. News reports said there was a disagreement among the founders, between the Shah family and investor partner G.S.K. Velu. With no buyers in sight, Shah decided to buy Warburg Pincus’ stake in her own name, despite the risk of personal debt.
“It was a big risk because I had to borrow money on my name (at 18-19% interest) to buy back the shares,” says Shah. It was a stressful time. Many people advised her against taking on a debt of Rs550 crore. “But I believed in my capability to drive the business forward, I was lucky to have the support of my parents and of a mentor in HDFC chairman Deepak Parekh. He helped me think through things. For me, the fact that a person so experienced felt that I was doing the right thing gave me the confidence. Also Shailesh Haribhakti (chairman of DH Consultants Pvt. Ltd), who has been a mentor for years and is on my company board.”
After taking ownership of the company and buying out partner Velu’s stake, she hired a team of professional managers, including a chief executive officer. She embarked on a series of partnerships and acquisitions, from labs in Tamil Nadu and Surat to Sri Lanka and Kenya. These two methods employed concurrently—hiring and acquiring—sum up her strategy. It explains how, from a single lab in Gamdevi, Mumbai, the company has expanded to a chain of over 140 labs and 1,400 collection centres across 350 cities and towns today.
With all the boardroom battles behind her, Shah now finds her days packed with the challenges of running a diagnostics business. “It’s a very unequal market in India, with very little monitoring. So while the government is talking about capping prices on some diagnostic tests, there is very little regulation to make sure that the guy next door who charges Rs60 for a cholesterol test is actually doing it.” Shah says she is proud that Metropolis has stayed honest in a market that is notorious for payoffs to doctors and medical administrators. She stresses the importance of ethics, rigorous quality, service and empathy as a way to stay ahead of the competition. And there is plenty of that—large firms like Dr Lal Pathlabs and Ranbaxy’s SRL, as well as a sizeable number of stand-alone labs.
Shah’s day is crammed with back-to-back meetings; she likes it that way. Some are with employees, some with business partners or the owners of labs she wants to acquire.
At a recent company get-together, Shah addressed 70 managers, who had come in from locations all over India, Sri Lanka, Ghana and Mauritius, on the values of accuracy and empathy. “We are not dealing with soap, which was half in size when you bought it; we are dealing with life and death, where a lab result determines somebody’s treatment. If that treatment goes wrong because of your diagnosis, then there should be a very heavy price to pay.”
Empathy is a quality that has stood Shah in good stead. As she moves away from the day-to-day operations of the company, focusing on strategic issues and acquisitions, she meets promoters and other people in the ecosystem. Many of her potential acquisitions are run mostly by older men, around 65, who are doctors. “At first they are uncomfortable with me, I am their daughters’ age, an MBA type.” But Shah says she makes a conscious effort to put them at ease, often dressing deliberately conservatively, and trying not to seem too aggressive. “You have to mould yourself in a way to make yourself more acceptable because of the biases people have. New employees who join, for instance, will always address my CEO as ‘sir’, but will address me as Ameera. I notice this, but it’s okay. It doesn’t diminish my authority in any way,” she says.
“In all situations, (a) majority (of) men notice looks in the first place, and capability, intelligence, nature, etc. is secondary,” Shah tweeted recently, on how building a business is challenging for women. It is a subject Shah is deeply engaged with. It goes back to Mohammed Yunus’ inspiring story. So while “making money, becoming successful is good, it’s important to change gears and to be able to give it up,” she says. And to use that time to do something she has always been passionate about—mentoring female entrepreneurs. In the long run, in fact, Shah plans to step back from her business to focus on her mentorship efforts