Wednesday, August 22, 2012

Of blood bags and an American dream!

His company came out with an IPO even before it rolled out the first medical device. Then, he had two choices – to make his dimes count or be annihilated. Luckily, his bet paid-off! Today, his outfit named Poly Medicure, is the largest listed medical devices manufacturer in India. B&E’s Steven Philip Warner and Amir Moin catch up with the risk-taker, as he lets-off some nostalgia at his oldest manufacturing plant in Haryana

When Himanshu Baid started off, he was not in an appropriate cash position to start a medical devices manufacturing business – what he had was just not enough. He was forced to borrow capital from his family and friends, roped-in banks and NBFCs and went public. 13 years later, his business is the largest-listed company on BSE (amongst all in the sector). It recorded a gross profit margin of 51.31%, much higher than the average of the sector (22.59%). With a revenue per employee record of Rs.1.44 million in FY2009, Baid, MD of Poly Medicure, who is also one of the largest shareholder of his company (8.83% stake held directly and another 4.32% indirectly), dreams to take this owner-cum-management entity to newer highs. With forays into the Chinese and Egyptian market already, he has his eyes set on his next target – the mature American market! Excerpts from the interview follow: B&E: 1997 was a time when everyone else was investing in the booming IT industry. Why did you choose the medical equipments business, even over the-then growing generic pharma?
Himanshu Baid (HB): When we started, my family was into the business of plastics. So this became a low-risk extension. The knowledge of that business helped us to set up this project. We had an experience in plastic-moulding. So medical equipments happened naturally.

B&E: You exist in an extremely fragmented industry, where you can at best enjoy a small pie of the overall business. Even the ratio of your revenues to the industry’s leads us to a figure which is less than 1%! Your explaination...
HB: We operate purely in a medical device segment. The industry figure that you are talking about is approximately $2.5 billion, which includes every single device that can be “quoted” directly or indirectly as a “medical equipment”. Out of this, we are mainly into products that are of one time usage in hospitals. This segment is roughly around Rs.30 billion in India. Now out of this Rs.30 billion market, the syringe category accounts for atleast Rs.10 billion. And we are not into syringes. So if you zero-down to the 78 products that we manufacture, we are left with a total market of less than Rs.10 billion, of which, we have a share of about 20%. That’s big.


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