Ranbaxy and the Telugu connection
Stock market pundits may be unsure of why Ranbaxy Labs has moved to buy a sizeable stake in Orchid Chemicals & Pharmaceuticals, but folks down South are not surprised. They term it the Malvinder-Garu magic.
Ranbaxy has shown an uncanny ability to acquire stakes in companies promoted by Telugu entrepreneurs, sometimes in the backyard of its chief rival Dr Reddy’s Labs.
In 2006, Ranbaxy bought 45% stake in biopharma firm Zenotech Labs, a Hyderabad-based firm promoted by Jayaram Chigurupati, a respected Telugu scientist who once worked at Dr Reddy’s. Later, Ranbaxy bought a 14.9% stake in another Hyderabad-based company, Krebs Biochemicals, in which the promoter of Dr Reddy’s, Anji Reddy, had a 5.1% stake.
The country’s largest drug maker also bought a minority stake in Jupiter Bioscience, founded by late KS Sarma and now run by his son, Venkat Ramana Kalavakolanu. Orchid’s Kailasam Raghavendra Rao is the latest in the illustrious line of Telugu entrepreneurs facing Ranbaxy’s acquisitive attitude.
The only difference this time is that Ranbaxy group had been buying up shares in the open market, while the earlier ones were all negotiated deals. While the twists in the Orchid sage have been worthy of the climax of any Telugu movie, one hopes Ranbaxy’s Telugu fetish will again have a happy ending, just like in Tollywood.
Courtesy: Economic Times