With four businesses to boot, why GSK Velu is placing his highest bet on medical technology
Gomathy SK Velu, one of the boldest entrepreneurs in health care, is fidgety on the sofa. In the residential lane of Abhiramapuram in Chennai, Trivitron’s office is quiet; the staff would arrive after 9.30 am. Inside the boardroom, impressive with stacked awards and citations, Velu finally settles after a short question-answer session. Then he is on a roll. Still, over the course of the two-hour conversation in which he gives a graphic flashback of the industry, the restless streak is evident. Perhaps this is what characterises a serial entrepreneur, a “compulsive risk-taker”. At 45, he has four businesses to boot and Velu doesn’t rule out additions.
“I am not a serial entrepreneur,” he says, laughing. “I am a parallel entrepreneur; I haven’t sold any of my businesses yet.” The word ‘parallel’ comes as a surprise; we don’t hear entrepreneurs use such a classification. But what’s in a name?
It was in 1997 that Velu started Trivitron as a small medical equipment and instruments distribution company. A year later, he founded a diagnostics business, Metropolis Healthcare, with his partner Dr Sushil Shah, a pathologist. By 2006, Velu consolidated Metropolis, topping it up with private equity investment from ICICI Ventures. Then he turned his attention to Trivitron, raising a separate round of PE funding for med-tech.
By 2010, when Warburg Pincus entered Metropolis with an $85 million investment, Velu had passed on the baton to Shah’s daughter and got busy turning around Trivitron. Since then, he has transformed it from a trading company to a brand-toting manufacturing firm. With Rs 400 crore in funding from Fidelity Growth Partners, it already has a few acquisitions under its belt, notably the Finnish group Labsystems Diagnostics. In the last three years, Velu has gone further and founded two health care services businesses—Apollo White, a dental and dialysis care hospital, and eye care chain Maxivision.
Sceptics may snicker that his breakneck expansion is non-synergistic. But many are already envying him for replicating the Metropolis business model to quickly get new speciality businesses off the ground. In fact, it’s his expertise in managing inorganic growth that drew the Apollo Hospitals group to partner with him after they failed to repeat their super-speciality health success story in day- and primary-care ventures. It took Metropolis nearly 15 years to get to the Rs 400-crore mark, but now, says Velu, it’ll take Maxivision and Apollo White just 4-5 years to gross this revenue.
Velu is buoyed as well as blasé about hospital business. For him, they can run on autopilot if the foundation is set right. For his group, they just form one of the growth engines. What keeps him ticking, perhaps even on his toes, is the scope and challenges in medical technology.
“Pharma is our big brother. Even though no single ministry or department recognises us, today med-tech is where Indian pharma was 20 years ago,” he says. “But this industry is being kicked around like a football; the buck is passed from one department to another —from science and technology to electronics, biotechnology to IT, commerce to finance, ministry of health… ,” he trails off.
The irony is, until two years ago, New Delhi didn’t even know how big this industry was, loosely estimating it to be Rs 1,500 crore. But professional estimates now raise that figure to at least Rs 25,000 crore, more than 75 percent of which is imports. With a few policies in place, Velu believes med-tech business could grow the way pharmaceuticals trailblazed in the previous decade.
“His is one of the more successful med-tech businesses and he is one of the more vocal champions of the local industry who draws attention to the skewed duty structure that hinders manufacturing,” says fellow Chennai entrepreneur S Nandakumar, founder of Perfint Healthcare.
Trading Travails
Another anomaly is customs duty that snuffs local manufacturing. Companies have to pay higher duties for import of raw materials and components as compared to finished products. China did just the opposite, and today is import-independent, says Velu. Medical technology largely comprises small and medium enterprises and hence needs a supporting environment. Europe has 22,500 med-tech companies with €95 billion in sales, with nearly 85 percent being SMEs.
(This story appears in the 28 June, 2013 issue of Forbes India. To visit our Archives, click here.)