Raay Neo Pharma, floated by the third generation of the Patni family, looks to build its branded generic drugs business in smaller towns and cities, pegging medicine prices 15-20 per cent less than the market price, says Amit Patni, founder of the fledgling pharma company.
The plan is to go into Tier 2 and Tier 3 cities where smaller companies operate, but for short periods of time (about six months to two years), says Patni, convinced there’s space to operate in this segment. “Coming from a trusted brand of Patni, …we are going to remain,” he says. Medicines will be priced 15-20 per cent less than companies like Sun Pharma or Mankind, Patni told businessline, adding that competition was present in any sector. While they presently outsource products from top manufacturers, plans are afoot to backward integrate. In about 18 months, Patni hopes to acquire a quality manufacturing facility, and is presently evaluating facilities in the ₹20-50 crore range.
Consumption story
The pharmaceutical industry is growing at about 10-12 per cent, he says, and consumption is evident even in standard products, he observes. In fact, it was his wish to be part of the consumption story that brought him to pharmaceuticals, he says, recollecting the options brought by a consultant they had appointed.
“We looked at some traditional industries like paper, plywood, textiles…. For me the consumption story is what I wanted to get into,” he said, as India gets to $5 trillion economy. “The consumption is growing at a rapid pace in all the sectors today whether it is automobiles, apparels, FMCG. And you see the consumption which is happening in these 2 and 3 tier cities,” he says, adding that pharmaceuticals was where the growth is.
But is this a late entry into a competitive and regulated market? Citing the paint and steel industry, he responds – “in India there is going to always be competition. It’s how you strategise and …capture the market.”
Building its field-force
An early mover in the IT sector, he recalls, Patni Computers eventually was sold in 2011. Having been with the family business in multiple capacities for over 25 years, he says, “I decided to start my own family office, so I took a share of my wealth and started Raay Global Investments….the idea was to build asset allocation across public markets, private markets and other alternatives.”
The financial journey of investments continued. About a year ago, pharma and branded generics was identified, he said. The company covers 10 therapies including gastro-intestinal products, antibiotics, respiratory, pain management, cardio diabetics, vitamins and sports nutrition – and expects to clock revenues of about ₹80 crore (March 2027). In about five years, it aims to clock ₹1,000 crore revenues, he said, and explore listing options.
The company is building its field force in populated states like Uttar Pradesh, Bihar, Madhya Pradesh, Jharkhand, Odisha, and Maharashtra – and is looking to add the Southern states, he said. Plans for exports are possibly in a year, he said, to the African countries, besides countries like Myanmar, Cambodia and Vietnam.