To date, yesteryear bollywood superstar Jeetendra has appeared in only one television commercial to endorse a product. That was in the 1990s, for a popular over-the-counter (OTC) energiser capsule for men called ‘30-Plus’. Jeetendra was in his late 40s then, but looked much younger. Though 30-Plus sold like hot cakes, revenues from its sales didn’t justify the exorbitant marketing cost that its maker, a then little-known company called Ajanta Pharma, incurred. (It sold 30-Plus to Dabur for an undisclosed sum in 2011.)
But even before it sold its bestseller, the Mumbai-based listed company—set up in 1973 by three brothers, Mannalal, Purushottam and Madhusudan Agrawal—had been incurring huge losses for many years. In June 2000, it was trading at just Rs 24 per share on the Bombay Stock Exchange with negligible interest from investors. In 2001-2002, it reported a consolidated loss of Rs 1 crore and by the following year, it was reeling under a debt burden of Rs 130 crore. Ajanta Pharma needed a shot of its own medicine, an energiser like 30-Plus. It found its antidote in the new generation of Agrawals: Mannalal’s sons, Yogesh and Rajesh.
“When I entered the business, we were all over the place in the domestic market. We had a generalised product portfolio and were trying to cater to the GP (general physicians) market, which was and even now is a big boys’ game [with companies like Sun Pharma and Cipla in the fray],” says Rajesh. “There is constant onslaught in terms of price competition in the daily prescription-based market. Very early on, I realised that this is not the way to make any progress. We had to differentiate ourselves and focus on specialties.” Rajesh chalked out a new business model: Ajanta would make generic drugs that were unique in their formulation and dosages, and create specialty brands (medicines that can only be prescribed by specialist doctors and not general physicians) in four areas—ophthalmology, dermatology, cardiovascular and pain management—where the competition was less intense.
It was Yogesh who convinced the company’s lenders in 2003 to open their wallets. After all, Ajanta needed funds to invest in new R&D and manufacturing facilities. Initially, bankers were apprehensive. In early 2003, Ajanta’s lenders, including officials from the State Bank of India and Exim Bank, gathered at a room in the Taj Mahal Palace in south Mumbai to hear Yogesh out. “I made a presentation for an hour-and-a-half about where we were earlier and how we planned to transition,” says Yogesh. “The investors asked us to step out so that they could discuss the plan. About 45 minutes later, they said they believed in our strategy and were willing to extend the loan facility we needed.”
With a strategy and funds in place, Ajanta has built a Rs 418 crore-business in India and is ranked 36 out of the top 300 companies in the Indian pharmaceutical market. Today, it stands net debt-free, with a cash reserve of around Rs 100 crore, according to its chief financial officer Arvind Agrawal. (Though he shares the same surname, he is not related to the founders.) Today, around 70 percent of Ajanta’s portfolio comprises products that it has made available for the first time in India, either in the way they were formulated or in terms of their delivery mechanism. Some examples of the first-to-market products that Ajanta has produced include Gatifloxacin, an eye solution that was available only as an oral dosage till Ajanta launched it in the form of eye drops; and Met XL, a cardiovascular drug that was available in dosages of two to three capsules a day till Ajanta launched a version of the drug that needed to be taken only once a day.
Since 2004, it has gradually been expanding to more emerging markets in Africa and Asia (which Yogesh oversees) with products that include antibiotics and anti-malarial and orthopaedic drugs. It is the first Indian generic drug-maker to secure pre-qualification from the World Health Organization for its anti-malarial drug, which means that international agencies like Unicef can procure such drugs from Ajanta as part of their global health care initiatives. In the international markets, it has registered 1,445 brands, and is in the process of registering another 1,609.
All this wouldn’t have been possible without investing in R&D and manufacturing capacity. “After we convinced our lenders about the strategy, the next step was to build a team that was aligned to the new vision,” says Yogesh. “We knew we had the required talent in-house and decided to build the new team from our existing employee base. So some people were given leadership positions, others left the company and, yes, some were asked to go.” At present, Ajanta, which has its main R&D centre in Mumbai, employs around 5,000 people in India and abroad.
Its workforce has evolved to keep up with the times. Before it changed its business model, Ajanta had some 600 medical representatives in its domestic pharmaceutical business team. The Agrawals transformed the unit into a specialty marketing division that would only visit specialist doctors and educate them on the benefits of Ajanta’s first-to-market drugs. Today, it has around 3,000 medical representatives in India, each doing an average business of Rs 15-20 lakh per year.
The company also took a conscious decision to build its own marketing team in countries where it had a presence, and not rely on third-party distributors to promote its products. As a result, it has a field force of 572 people across 35 countries. “Many pharmaceutical companies have tie-ups with distributors who take care of product marketing. But they charge their own margins and deal with multiple products. In contrast, my medical representatives are single-mindedly responsible for ensuring my product moves,” says Arvind.
In terms of manufacturing capacity, Ajanta has four plants, three in Aurangabad (Maharashtra) and one in Mauritius. One of the three Aurangabad units is approved by the United States Food and Drug Administration (USFDA) and The UK Medicines & Healthcare Products Regulatory Agency. (This means that drugs produced from this unit can be exported to the UK and US.) It has recently commissioned a facility in Dahej, Gujarat. According to Arvind, this unit will start commercial operations by FY17. Another plant in Savli, Gujarat, is also in the pipeline. To date, Ajanta has invested around Rs 300 crore towards capital expenditure and R&D, and plans to invest another Rs 400 crore over the next two to three years which, according to Yogesh, should be enough to take care of its aspirations in the US and emerging markets.
Promoters and analysts tracking the company agree that the next big thing for Ajanta will be scaling up its presence in North America. The drug maker has filed 25 Abbreviated New Drug Applications (ANDAs), which is an application to the USFDA, requesting approvals to market new formulations of existing drugs. The expected market size that it will cater to based on the applications already filed is $1.5 billion. Its latest investor presentation states that it intends to file at least six ANDAs per year. According to Yogesh, Ajanta will eventually aim for a 20-25 percent share of this market. A March 2015 report by Anand Rathi Research states that Ajanta’s US business could grow exponentially to be worth $8 million (around Rs 50 crore) by FY17.
Check out our Festive offers upto Rs.1000/- off website prices on subscriptions + Gift card worth Rs 500/- from Eatbetterco.com. Click here to know more.
(This story appears in the 24 July, 2015 issue of Forbes India. To visit our Archives, click here.)
I am proud to be of this successful journey of Ajanta Pharma, as i was the first analyst to write a research report on Ajanta Pharma as a midcap analyst at Motilal Oswal in 2010.
on Aug 9, 2016I am proud to be part of Ajanta PHARMA
on Dec 18, 2015Feeling proud to be a part of Ajanta pharma ltd.from Chandigarh
on Aug 5, 2015congratulations to mr yogesh and rajesh agarwal for getting this honour to be listed in forbes magazine .. it surely takes a lot of guts and drive to achieve this milestone.. feeling good to be a part ajanta growth story.
on Aug 4, 2015Congatulation to Ajanta Pharma and to all teem.It is very pleasur to work with Ajanta Pharma. It is very great feeling
on Aug 4, 2015I am feeling very proud that i am a part of such a good organisation like AJANTA PHARMA
on Aug 2, 2015i am proud to work in ajanta pharma ltd. congratulations to all ajanta member, dehradun
on Aug 2, 2015congratulations to all my friend i m very happy i be a part of ajanta pharma ltd..
on Aug 1, 2015Feel Proud to work in Ajanta Pharma Limited. It\'s a great news for me and all employees.
on Aug 1, 2015Am very proud to saying working at ajanta pharma
on Aug 1, 2015Congratulations to all Ajanta pharma is my first company and I am very happy and also feel a great honor to be a part of Ajanta pharma ltd.
on Jul 29, 2015I feel a great proud being part of Such a visionary compny
on Jul 29, 2015We are proud to work in \"Ajanta Pharma Limited\'\'
on Jul 29, 2015Enlightened on reading this article. This gives the visionary of Ajanta by our new generation directors. And am sure that days are not far off that Ajanta finds a spot at top 10 indian player. Feeling proud to be a part of the team....
on Jul 29, 2015I am proud of an emply of Ajanta pharma ltd since 1997
on Jul 28, 2015I am proud of an emply of Ajanta pharma ltd since 1997
on Jul 28, 2015Congratulation And I am proud to be a part of ajanta.
on Jul 28, 2015I am a part of AJANTA PHARMA LTD. I am working as MEDICAL REPRESENTATIVE at AMRITSAR . (PUNJAB) for last three year. Its proud moment for all of us...
on Jul 28, 2015I AM VERY PROUD TO BE A PART OF AJANTA PHARMA
on Jul 28, 2015Feeling proud to be a part of ajanta pharma ltd.
on Jul 27, 2015Congratulation sir and Iam proud of this.
on Jul 27, 2015I am proud of an employ of \"Ajanta Pharma Ltd.\"
on Jul 27, 2015Congrats APL... Wish APL will have more success in near future...
on Jul 27, 2015We are proud to work in "Ajanta Pharma Limited".
on Jul 27, 2015IAM PROUD TO BE THE PART OF GREAT COMPAMPANY WITH HIGH VISION..
on Jul 27, 2015congrats Ajanta pharma..
on Jul 27, 2015Great product ajanta pharma limited
on Jul 26, 2015GOOD GROWTH WE ARE PROUD TO WORK IN AJNANTA PHARMA LTD
on Jul 26, 2015feeling proud to be a part of ajanta pharma ltd.
on Jul 26, 2015Excellent...
on Jul 26, 2015Great .... Ajanta Pharma Ltd. is my first joining company and today i thank to god for a good start of my carrier,and I feel proud to work in Ajanta Pharma Ltd. and being a part of it....
on Jul 25, 2015Feel Proud to work in Ajanta Pharma Limited.
on Jul 25, 2015congratulations dear respected sir, we are very enjoy this success to be an employee in ajanta pharma , it is a great achievement for us
on Jul 25, 2015I am with Ajanta pharma since last 11 yrs,because vision is clear,My organisation will be amongst top 5 very soon
on Jul 25, 2015Sir yogesh and sir rajesh, congratulation to you.I am proud to be part of it.By Kolkata team avecea.
on Jul 25, 2015i am reading this article today.ajanta pharma gives us very good combination drugs.
on Jul 25, 2015proud to be an ajantatian.........
on Jul 25, 2015i am feeling proud part of AJANTA FAIMALY....
on Jul 25, 2015Realy its bring a great houner.feeling proud to be a part of AJANTA FAMILY
on Jul 25, 2015Realy it brings a great houner..proud to be part of the AJANTA FAMILY
on Jul 25, 2015Felling Great and Proud to be the member of Ajanta Pharma Family....
on Jul 25, 2015very good news for all AJANTA FAMILY
on Jul 25, 2015I am proudly say .I am part of ajanta Pharma famil
on Jul 25, 2015Very good news. I am proud to be a part of AJANTA PHARMA.
on Jul 25, 2015I am happily to say I am part of ajanta Pharma family .ajanta Pharma one of the biggest developing company .
on Jul 25, 2015Great Proud to be one of the member of \"Ajanta Family\"
on Jul 25, 2015Great & superb achievement Proud to be part of it.
on Jul 25, 2015HAPPY TO BE PART OF SUCCESS,AND A GREAT PRIDE MOMENT, LET US AIM/COMMIT FOR NO.1 POSITION.
on Jul 24, 2015we are proud to work in ajanta pharma limited, it is a great achivement
on Jul 24, 2015WE ARE PROUD TO WORK IN AJNTA PHARMA LIMITED & GREAT ACHIVEMENT
on Jul 24, 2015I am proud to working in this organization.
on Jul 24, 2015feeling proud to being a part of Ajanta\'s from last seven years hats off you sir,
on Jul 24, 2015I am proud to work in AJANTA PHARMA LIMITED.
on Jul 24, 2015its a proud of matter for us that we are a member of this company...its a success story of all our ajantian.....if we working together like that then one day our company will achieved rank one position..but after that our journey is must...our success is a journey not a destination....if we want something then all the universe conspires in helping us to achieved it..........
on Jul 24, 2015It\'s a great news for me and all employees.
on Jul 24, 2015Great ..inspirational
on Jul 24, 2015great , proud to be part of ajanta
on Jul 24, 2015Its an honour to work with Ajanta pharma... Thank u
on Jul 24, 2015We are proud to work in \"Ajanta Pharma Limited\".
on Jul 24, 2015Great Proud to be part of it
on Jul 24, 2015Great show of Brand Building with a vision.
on Jul 24, 2015Great
on Jul 23, 2015Great Going Of Ajanta Pharma Limited.
on Jul 23, 2015Feeling proud to be one of the member of Ajanta Family
on Jul 23, 2015A GREAT COMPANY TO WORK AND INVEST. GREAT UNIQUE PRODUCTS THAT STANDS OUT FROM ALL OTHER\'S EVEN TOP PLAYERS
on Jul 23, 2015Proud to be a part of ajanta pharma...good going sir...hats of to you...rajesh and Yogesh sir
on Jul 23, 2015Verry good.It is realy a good news to all of our ajantaians. I sure that ajanta grow more verry first in comming days.
on Jul 23, 2015Great & superb acheivement for brand building vision...
on Jul 23, 2015Great Going ..Right strategic initiatives
on Jul 22, 2015Great show of Brand Building with a Vision.
on Jul 21, 2015Great show of Brand Building with a Vision
on Jul 21, 2015Ajanta Pharma LTD is my first company and I thank to God for a good start of my carrier, with company and I proud to work in Ajanta Pharma last 5 year. I am very happy to share that our MD and JMD are the proud winner of TIME magazine young maker Year of the award given by the Honorable Prime Minister Shri Narendra Modi. so feeling likes Boom
on Jun 26, 2019