Benchmarking

P Vaidyanathan Iyer: We are all curious to know why you decided to sell your Ranbaxy stake to Daiichi Sankyo?

We were in the fortunate position of not being overly skewed towards developed countries. Our plan of hitting our revenue target of $5billion by 2012 could have been achieved on our own, with a projected growth of 20% over the next many years. The issue in front of us was to take our company to new levels. With this deal, we put together a model that will be seen as a path-breaking move in times to come.

Daiichi Sankyo was impressed by our innovative R&D, our SEZ in Mohali that represents a huge prospect for leveraging India's manufacturing capability, our management of the life cycles of different products in developed markets, and our ability to facilitate these strengths in emerging markets. We also had stakes in Zenotech, the biotechnology company that offers us a midpoint between innovation and generics.

Even at our first meeting with Daiichi Sankyo, we discussed possible alliances. Eventually, the discussion evolved to a stage where they said: 'we think we can do great work together; we would like to take a majority stake in your company'. It gradually became evident to us that if our family did not sell its entire shareholding, the probability of Daiichi Sankyo getting this majority stake was low. Emotionally, my first response was that I was not interested in selling my equity. But as a CEO, it was important that I took the right call for the company. The cost of this would be that I wouldn't have any equity left in a company that my grandfather had started, that my father had taken global and that I was continuing to build on in an environment that is hostile to generics.

If this deal took the company...