It’s an emotional moment for Dr A Velumani, a scientist who built Thyrocare from scratch in 1995 and is now selling it to online pharmacy PharmEasy. His excitement and confidence are palpable.
“One plus one is not two, but probably five. So it’s a very rare, unique combination, first time of its kind in the diagnostics space,” Dr Velumani said.
Asked why he’s selling the company he founded, Dr Velumani said, “The company has not been doing as well as it was doing earlier. My wife was the strength behind that growth over the last five years, especially last out of five years, three years it was just blank… There was no financial constraint, there was no emotional constraint at all. My children are old enough to run it. Somewhere I felt, let’s look at some change.”
The founder-promoter of Thyrocare said his family held a large chunk of the company’s shares and was advised not to take on such a large risk. He enumerated the benefits and power of aggressive large investors behind a company.
“You know why I didn’t do very well? Because 65 percent of the stock was with me. I said risk lena hai. So this was something which was told to my family – don’t take big risks. Look, I don’t want to have too big a stock and drop the organisation’s future and that’s why this relationship has come in.”
On the non-compete clause in the transaction, Dr Velumani became very emotional.
“The word non-compete means that I need to be blocked or I will fight with my child. No, this is a very unique relationship. I don’t have to compete with me,” he said.
Thyrocare, which listed five years ago, has given returns to shareholders but also trades at lower multiples than its peers. It hasn’t been an easy ride for the company, Dr Velumani reminisced.
“I’ve had some shortcomings. I had to fight with people who did not have the ethics of communicating in the market field. Velumani test hi Navin karat hai! In spite of that, I had an impressive growth of 40 percent CAGR from the day I started. I wanted these investors to take it. And then, am pretty sure this combined company will be the single largest healthcare provider in the country.”
As part of the deal, Dr Velumani will invest Rs 1,500 crore back into API Holdings, PharmEasy’s parent company headed by Siddharth Shah, for a 4.9 percent stake and will continue to have his skin in the game as an investor.
“My advice to Siddharth would be: Don’t look at the competition side, look at the opportunities side.”Words of wisdom to the new owner of Thyrocare as the old one signs off.