Want to diversify to some consumer business space like FMCG: Arjun Handa

Interview with executive vice chairman and group managing director of Claris Lifesciences

After selling off his high-growth speciality injectables business which has a strong US pipeline to Baxter for $625 million, Arjun Handa, executive vice chairman and group managing director of Claris Lifesciences Limited, is all set to start something new. He now wants to build something in the consumer space, like FMCG. In a chat with Sohini Das, he shares his future plans and reasons why he sold the injectables company

What is your plan post sale of your injectables business? What do you plan to do with the proceeds, invest in pharmaceuticals, or diversify?

We will take some time to close this deal, there is a transition and everything else to manage, but we are interested in diversifying to some consumer business space, like FMCG and all. We will start that a little later after all this is done, may in the second half of next year or so. We will use the proceeds of this deal to give back to the shareholder, and some of this cash would be used to build the next business

Is there any non-compete clause to enter injectables business?

I cannot divulge too much, but yes there is. 

The injectables division was doing well. Why did you think of selling it off?

I think injectables is a very niche segment, and end of the day to grow beyond a limit, you need a large company with a lot of resources and management quality to really take this forward. So, our job was to build a really good platform, great people, technology and quality products. But, I think if this goes into the hands of a larger company, they will do better with the business. I like creating ideas and new businesses. So, I think, this idea has come to a level, where someone has to do this in a better way.

Some PE firms and even companies had earlier backed out citing stretched valuation. What is your comment on the deal size?

Very few people actually understand the injectables business, it is new for India. In the last two years, we were growing at 50% year-on-year. We had attained a very high growth rate and we have a very strong pipeline in the US. So, I don't think the business has been over-valued at all. Baxter understands the business, they have been in injectables space for 50-years or so, and they can take advantage of the platform. I think it is the right value for the business, not over-valued at all.