I have always been a great admirer of the late Parvinder Singh. He transformed Ranbaxy Laboratories from a boring India-focused copycat drug maker into a discovery-driven pharma company (well, almost).
For a few years after Singh’s death, the successor he chose, D.S. Brar, did pretty much the same thing—and almost as well.
Since his departure, however, things haven’t really gone well for Ranbaxy.
To be fair, things didn’t go well for almost all Indian pharma companies for several years between 2004 and 2008 (2009 was better, at least in relative terms). Maybe they grew too much too fast without doing what was needed to sustain this growth structurally.
So, suffice it to say that Malvinder Singh, Parvinder Singh’s son who stepped into Brar’s shoes, hasn’t really covered himself in glory as a manager.
Malvinder, or Malav as a lot of people call him, is sincere and intelligent, both ingredients that contribute to the making of a good leader. He didn’t have much luck though, until he managed to sell for a handsome price the Singh family’s stake in Ranbaxy to Daiichi Sankyo.
Since then, however, he hasn’t put a foot wrong.
To be sure, that seems to be something that happens to good managers who suddenly find that they have a lot of money at their disposal.
Malvinder Singh’s uncle Analjit Singh found himself in a similar situation in the late 1990s when he exited a telecom operation in Mumbai (which eventually became Vodafone Essar’s Mumbai operation) at a price. He invested this money in several new businesses, and while his success in IT had been limited, he has managed to make significant progress in healthcare and, even more so, in insurance.
Malvinder Singh has followed suit. His family’s Fortis Healthcare has been on a shopping spree since the Daiichi deal. First, it acquired several hospitals from the beleaguered Wockhardt. Then it went out and acquired a significant stake in Singapore’s Parkway Holdings (it controls 16 hospitals in Malaysia, Singapore, Brunei, India and China). More than one person has told me in the past two days that Fortis is the company to watch in the Indian healthcare space.
The Singhs have similar plans for their other business, finance, as well. Religare Enterprises could well seek a banking licence if and when the Reserve Bank of India decides to go ahead and issue some more.
Clearly, Malvinder Singh is doing the right thing by both his new businesses.
Which raises an interesting question: Does it sometimes make sense for promoters to cash out of a company—a good one, but also one where they face significant challenges—and use the money to good effect to enter new areas or grow businesses in areas they have already entered?
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