The alchemy of success

There are times in the Odyssey of Courage when you tend to forget the book is the story of Indian drugmaker Wockhardt told by its architect Dr Habil Khorakiwala. There is, for instance, the gritty narration of Mumbai, then Bombay, during the riots of December 1992 when his family was protected by their Hindu neighbours. Or the more edge-of-the-seat recounting of the decision Khorakiwala had to take when Wockhardt debuted at the stock market with its Initial Public Offering that was to open on December 3, 1992.

The plan was to keep the public issue open for four days. On December 5, the issue was oversubscribed by four times and yet by noon Khorakiwala had to take a crucial call on closing the issue. Thinking with clarity and his eyes clearly on the developing political scenario, Khorakiwala went against counsel and decided to close the IPO, “thank the investor and go home”. The management did just that. On December 6, the Babri Masjid was demolished and, subsequently, markets collapsed. “Life had already taught me not to be greedy... We were oversubscribed several times more than I had anticipated,” Khorakiwala says, explaining through his decision the prudence in walking away when you have got more than you anticipated.

However, another public offering from the Group for Wockhardt Hospitals did not benefit from such classic timing. The proposed hospital IPO had to be withdrawn after it succumbed to market volatility triggered by the 2008 economic crisis. Here though, the businessman does not reveal his thoughts on a good hospital project being hit by the bloodbath in the global markets.

Humble beginnings

Khorakiwala tells the Wockhardt story and his own by harking back to his grandfather’s journey to Bombay from Palanpur (Gujarat) in 1896. He set up a kirana (provision) store that grew and under his father became the more fancy Akbarally’s, a fore-runner to the supermarket that is commonplace today. Habil then charts his own course as the family firm, Worli Chemical Factory made way for Wockhardt, a name that he quips is a mix of Worli and Chemicals and made to sound German!

The book tells a strong story on the birth of an Indian drug company and its journey through difficult political times in India, a volatile global market scenario and changing patent regimes. Right at the start, you are plunged into Wockhardt’s antibiotics research and its promising pipeline of products, at a time when the world and India are grappling with resistance to antibiotics. A scenario where even the slightest infection can kill you, if your body has developed a resistance to antibiotics.

The author does not befuddle readers with pharmaceutical jargon. In fact, there are detailed explanations on why research on new antibiotics is important, as multinationals showed less interest in it and as infections began to raise their ugly head. For pharma junkies, there is an interesting backstory on the setting up of manufacturing units at Chikalthana and Waluj, now in the news for their tryst with the USregulatory authority. Here too, it does not get behind why regulatory problems arose at these plants or how they were dealing with it.

If it’s a peep into the domestic pharmaceutical industry that you want, this book serves up a neat slice of those dynamic times. But for those bitten by the entrepreneurial bug, there are many nuggets of business insights that regular b-schools may not tell you. For instance, integration is a word often bandied around in circles dealing with mergers and acquisitions. Having been on a shopping spree himself, Khorakiwala says, “There is a great deal of management literature about integration after acquisition. We do not integrate. We assimilate.”

Giving a view rooted in India on overseas acquisitions, he says, acquired companies have local teams, but the leadership was from India. Pointing to his US experience, he candidly narrates how native Americans and non-resident Indians adopt “a superior attitude when dealing with an Indian businessman”. Convinced from his experience in the UK and Europe that “there was no such iron law of global competence”, Khorakiwala says he decided to send a senior Indian colleague to head their US operations.

Uncomfortable truths

For those interested in the economic crisis and the clawback of firms that made bad decisions in a bad time, Khorakiwala’s recounting of the company’s foray into derivatives that went awry, is a must read. Mounting debt led him to taking matters into his hand and entering into a debt restructuring exercise where the company had to sell some of “crown jewels” to safeguard its core.

Admitting that he had taken his eye off the ball by trusting one of his lieutenants, Khorakiwala puts upfront the uncomfortable truth that banks too were as much part of the problem. After some banks took Wockhardt to court, he says, the company argued “it was not just us that had erred in performing our fiduciary due diligence on derivatives trading but the bank too had not done its job.... In fact several banks, especially foreign banks had actively encouraged our finance managers to invest in derivatives,” some in violation of the RBI’s rules, he says.

Khorakiwala’s candid recounting of his decisions and mistakes are supported well by lucid writing. What may distract from the growth story of the domestic drugmaker may be may be descriptions and pictures of the family. But that again could in a sense serve in stitching together the personal side of the man who built a lead player in India’s pharmaceutical industry. The Khorakiwalas’ story of the “immigrant entrepreneur” who “works doggedly to succeed in a new place for he has nowhere else to go” is a read at many levels even for the regular non-business reader. And that’s because of the prevailing spirit in the book of taking the hard knocks on the chin, only to be able to pick yourself up and move ahead.

MEET THE AUTHOR: Habil Khorakiwala is the Founder-Chairman of the Wockhardt Group. Currently the Chancellor of Jamia Hamdard University, he was president of FICCI and the Indian Pharmaceutical Alliance.

COMMENT NOW