It's raining billionaires in India's pharma and health care space

Created 7 billionaires in 2020; now 17 super-rich promoters in the sector with combined wealth of Rs 4.35 trillion

The pharma and health care space is the latest breeding ground of India’s billionaire promoters. The sector created seven billionaire promoters in CY2020, thanks to pandemic-induced growth. This is more than half the new billionaire promoters last year.

For comparison, 13 promoters across sectors entered the super-rich club last year while five exited the list due to a fall in their companies’ market capitalisation.

Now there are 17 super-rich promoters in the pharma and health care space, up from 10 last year. These promoters had combined wealth of Rs 4.35 trillion, or around $60 billion, at the end of December 2020, up from Rs 2.7 trillion a year ago. The combined net worth of these 17 promoter families was up 61 per cent or Rs 1.65 trillion (around $23 billion) over their net worth last year.

The pandemic led to a rally in share prices of drug manufacturers, hospital operators, diagnostic companies, and chemical companies that manufacture raw material for the pharma industry.

In comparison, there are four super-rich promoters in the IT services or technology space with combined net worth of Rs 4.11 trillion at the end of 2020. Azim Premji of Wipro tops the chart in the IT space with net worth of Rs 1.63 trillion. The combined net worth of all promoters across sectors was up 35 per cent in 2020 to around Rs 42 trillion.

Premchand Godha of IPCA Labs was among the fastest climbers as he entered the billionaire club for the first time in 2020. His stake in the company was worth Rs 12,805 crore at the end of 2020, up 94 per cent on a year-on-year basis. (See adjoining charts.) This makes him the 58th richest promoter in the listed space, up from 83rd rank last year.

Other entrants from the health care space include Prathap C Reddy of Apollo Hospitals with net worth of Rs 10,340 crore, Mannalal Agrawal of Ajanta Pharma (around Rs 8,500 crore), and V C Nannapaneni of Natco Pharma, whose net worth was up 62 per cent last year to Rs 8,570 crore.

The rally in the stocks of chemicals companies benefited firms such as Atul, Deepak Nitrite, and Alkyl Amines.

Sunil S Lalbhai of Atul is the country’s 78th richest promoter with net worth of Rs 8,550 crore at the end of last year, up 59 per cent y-o-y. His peers at Deepak Nitrite and Alkyl Amin missed getting into the super-rich list last year by a small margin.

The analysis is based on the promoters’ stake and market capitalisation of a common sample of 807 companies that are either part of the BSE500, BSE mid-cap, or BSE small-cap index. 

The market value of promoter stakes is net of cross-holding of the listed companies of a particular group.

 The sample excludes government-owned firms, listed subsidiaries of global multinationals, companies owned by financial institutions and their subsidiaries such as L&T, HDFC, and ICICI Bank. The list also excludes Tata Group, where ownership rests with charitable trusts rather than individuals or families.

Overall, Murali Divi of Divi’s Lab was the biggest winner among his industry peers. His net worth more than doubled last year to Rs 53,000 crore and Divi’s Lab became one of the top-performing large caps last year. This now makes him the 16th richest promoter in India, up from 28th last year. Other big gainers are P V R Reddy and K N Reddy of Aurobindo Pharma with net worth of Rs 28,000 crore, up 102 per cent, and Sharvil Patel of Cadila Healthcare with net worth of Rs 37,500 crore, up 89 per cent y-o-y.

Dilip Shanghvi of Sun Pharma remains the country’s richest pharma promoter with net worth of Rs 81,200 crore, up 37 per cent Y-o-Y. He is now the eighth richest promoter in the country, up from 10th last year.