Forbes India 15th Anniversary Special

From zero debt unicorn to successful exit: Arokiaswamy Velumani's journey with Thyrocare Technologies and life since

The founder of Thyrocare Technologies talks about his inspiring journey from Rs500 to Rs5,000 crore and disrupting the multi-billion-dollar diagnostics industry to make thyroid testing affordable for millions of Indians

Neha Bothra
Published: Aug 3, 2023 10:44:42 AM IST
Updated: Aug 3, 2023 11:10:30 AM IST

From zero debt unicorn to successful exit: Arokiaswamy Velumani's journey with Thyrocare Technologies and life sinceArokiaswamy Velumani, Founder,  Thyrocare Technologies Image: Joshua Navalkar
This is Arokiaswamy Velumani’s formidable rags-to-riches story of how he steadfastly overcame the challenges of poverty, disrupted the diagnostics industry, and made thyroid testing affordable and available to millions of Indians. A scientist-turned-entrepreneur, he built a zero-debt unicorn with an initial investment of around Rs1 lakh. However, in 2021, he sold this company to PharmEasy for over Rs4,500 crore. In an exclusive interview on Forbes India Pathbreakers, he talks about how he built the world's largest thyroid testing centre, the curious case of new-age entrepreneurs’ business strategies, his unconventional take on philanthropy, and his business plans. Imitating his favourite actor Rajinikanth’s dialogue from a film, he says, “My path will always be a bit different.” Edited excerpts:

‘I am known for taking decisions which everybody questions’

I didn’t start Thyrocare thinking that I will go for a listing [on the stock exchanges]. I went for listing. After listing, I found a lot of stakeholders’ expectations were too high. I lost my wife in 2016 just before the IPO. That was a setback for me. The next two to three years made me realise how dependent I was on her. Then Covid came into the picture, and my company was the first company selected for Covid testing. I scaled up from 400 teats to 40,000 tests a day. Within eight to nine months, I scaled up. The share price had doubled, everything went on well.
At some point, I felt if someone is interested in running Thyrocare, it was the right time to take a call [to sell Thyrocare]. I took the call. It was not one or two reasons. I am known for taking decisions which everybody questions. If I did something better and bigger, it was a good decision. If I enjoyed and lived happier, then it was a good decision. I’m sure it was a good decision. My children were not keen to run it in the long run. I innovated that business 27 years back. It went on very well—25 percent CAGR for 25 years. I thought everybody is now copying, other companies have come into the picture, let me relax. I’ve made enough money. I came to Mumbai with Rs500. I’ve added three zeros. Don’t need to be greedy. So, I took the call. That call, in fact, was to surprise everyone.
All three posts—CEO, MD, chairman… everything was me and today, I have no post, no visiting card. So, everything is different, but having said that, I am enjoying again, in a different avatar, in a different location, so it is perfect and much better than what I had imagined. This wasn’t out of compulsion. It was my own decision. Once you have sold all your stock, you need to find out what’s to be done next. All was expected but nothing was planned.

‘A business must make profit, then scale up, then burn the profit’

The ecosystem is different. Of course, today’s entrepreneurs are different. The current generation is 30 years, 40 years behind me. They were brought up in a different environment. My parents were poor… their parents are not poor. In my days lending was not easy, but today you have banks and enormous support of investors. All these new-age entrepreneurs have to succeed to justify all their strategies.
In the first five years, my focus was to set the business model right. My amplification of the business was not 1 to 10 to 100 to 1,000. Mine was 1 to 2 to 4 to 8. So, I was quite slow. In fact, I have a punchline to add here. Success is never a problem, sustaining success is the problem. You can’t keep burning money without profit, and if later profits don’t come, you are gone. According to me, a business must make profit, then scale up, then burn the profit, this is what I did. In fact, the private equity money in my company had not come inside the company… it was a secondary infusion.
I don’t think the situation today is different where you need to burn money to grow. Earlier also manufacturing companies needed infrastructure which requires money. Today you don’t have the cost of infrastructure. You can hire any big office overnight. But you need money to reach the consumer. Money was needed then also and is needed now as well. Earlier there was no way of raising funds; today there are ways to raise funds. In fact, today there are more investors than investees.
Thyrocare was a zero-debt company. It would be a great study on how a man without any big investment into the business built a unicorn. So, that’s a very different way. I don’t think I can also repeat that. Those days there was no competition. I could disrupt on the pricing front. Today the environment is highly competitive. Of course, there is enough room to disrupt today also. Any entrepreneur who identifies that space intelligently can be successful.

Also read: How Arvind Lal built a single lab into India's most valuable diagnostic services powerhouse


‘You should only go for an IPO if you have a solid business plan’

Those days [of building Thyrocare] were different. There wasn’t a rush to do an IPO or give an exit to investors. These things were not there. Now, people go for IPOs in the beginning itself, selling a dream. If the dream is sold with honesty, investors will get returns. But I see a lot of investors getting trapped. A lot of companies that got listed have lost 60 percent of their market cap and suddenly they stand naked. This has scared new investors. Now IPOs are not happening. I don’t think it is crime to look for money without profit, but it is a crime that you know you will never make profit… but you are taking money. That’s a crime. But if an entrepreneur is unaware that the business will never make money, then that is stupidity. You should only go for an IPO if you have a solid business plan.

‘Evaluating business models that create social impact’

I’m very actively involved in evaluating startups. If someone wants funds, I tell them whether I invest or not, I can engage with you and give you feedback. Some of them have vague dreams which can be difficult to take ahead. Some of them have no idea, no experience, no money. They are just out of college. But there are some interesting projects. I haven’t still committed. I will wait for some more time. I don’t want to get into a startup which does not produce even a Rs50 crore turnover and Rs5 crore profit. I will only invest at the stage when scaling-up needs money. While experimenting, the guy wants to buy one more costly car, and he is looking for funds. If frugality is not there, I’m not on board. I don’t want to get carried away.
Ideally, for me, given my 40 years of experience of life and 27 years of business experience, I should identify a business which makes sense to me and produces employment and creates social impact. I now have cash to scale up. And if it reaches scale in five to seven years, I will allow it to go. I may not opt for an IPO again because that is getting into a chaotic arrangement of answering all small investors. There are three kinds of investors. One investor comes today morning and goes in the evening. Another comes this month and leaves at the end of the quarter. Another investor comes and wants to remain invested for 25 years. All three have different expectations… which investor must one be answerable to?
I look at businesses which will produce more jobs. Which are more into manufacturing rather than services. I am looking at creating an organisation where the less-educated-but-more-physically-working people are involved. I am a little convinced about agritech because the country has a lot of agricultural land and unemployed people in rural villages. I think getting them to do something meaningful, putting some infrastructure there, processing food, meat, agricultural products will help. I came from there. I was the son of a farmer. When I go back there, they all want to work. They don’t want a free meal. I am looking at a Rs100 crore investment in rural areas to create 5,000 jobs so that there is prosperity there. If this model works, I will replicate it in five to six other locations. It will take seven to eight years for me to learn, make mistakes, and then think of scaling up the model.

‘Those who talk philanthropy don’t do philanthropy’

I think those who talk philanthropy don’t do philanthropy. In my opinion, philanthropy is nothing, but not to overcharge. When the entire market was charging Rs600 to 700 for a test, I charged Rs250. That’s philanthropy. Social entrepreneurship as a concept was unknown then. This is a new hybrid word. I have done it long back. What did I do? Charge less. One day my daughter asked me if I was rich. I said yes. Then she asked me what I wanted to do with all the money. I thought like Bill Gates, Azim Premji, I will give it to society. But she said all of them take from society and give it to the patient. You take from the patient and give it to society. Wow. What a lesson it was. I came and reduced the rate. Here’s a punchline. If you take less, you get more. If you take more, you only get less. I have done it that way. I keep discussing with my children what if we do a business without profit. That is philanthropy. That’s what is driving me now. I don’t want to make a profit after that village man comes and works with me. I want to make sure it gets back to them. So, philanthropy, CSR, is all about creating jobs and getting them dignity and salary without any compromise.