Multibaggers of the decade

Financial numbers are a reflection of management actions. While a competent management can bring a company unparalleled success on the back of its vision and passion, an incompetent one may sound the death knell for the company. The management is to a company as the captain is to a cricket team. M S Dhoni, who was a newly appointed captain, led the Indian cricket team in the 2007 T20 world cup. Backed by his vision and determination, the Indian team won the world cup. Similarly, when it comes to transforming a small business to a big brand, its management needs to march ahead with a bold vision and beliefs. The ugly truth is most small companies either remain small or die. Only a handful of them break into the big league. Here we bring you the stories of five small companies that have turned large over the last 10 years. We have selected these five companies based on the growth in their market capitalisation over 10 years. Aurobindo Pharma Hyderabad-based Aurobindo Pharma started operations in 1998-99 with one facility, at Pondicherry, manufacturing semi-synthetic penicillin (SSP). Today, it is the second-largest Indian generic pharma firm by prescription in the US and the tenth-largest generic company by sales in the world. It specialises in complex injectables and medicines for diabetes, AIDS, nervous systems and dermatology. It operates 11 units for APIs (active pharma ingredients; intermediates in drug manufacturing) and 15 units for formulations. Ten of those units are in India. It exports to over 150 countries across the globe. Humble beginnings The story of Aurobindo began in 1986 with Ramprasad Reddy, a purchase-department clerk, starting business by pledging his family's gold. In its initial years, Aurobindo manufactured and sold APIs in the domestic market. This was a low-margin, commoditised business. What propelled it into the envious position it is in today was its foray and specialisation in complex generics and injectables. The transformation The shift in Aurobindo's fortunes came in a gradual manner, in phases. The first involved Aurobindo focusing on high-margin generic formulations in the mid-2000s. Its strong API integration, especially its facility in China, supported the formulations business. The steady API supply cemented its position as a key formulations maker. In 2005, the next phase of the transformation came with its entry into complex generics and sterile injectables for the US market. This was a period when the entire Indian generic industry was happy making copies of patented drugs. Aurobindo's entry into complex generics propelled it into advanced R&D and superior capabilities to manufacture complex drugs. By the time the party in the US ended for domestic players, Aurobindo was far ahead of most of them with its portfolio of complex drugs and injectables. Navigating difficulties Aurobindo's growth has not come without hiccups. Over the last decade, it has faced a number of issues. Back in 2012, it was named by the CBI in an investigation into a land-allocation deal, which had political undertones. The following year, the ED attached 96 acres of land and fixed deposits of Rs 3 crore of APL Research Centre, a subsidiary of Aurobindo Pharma. More recently, in May this year, USFDA raised concerns regarding three of its units. Subsequently, one of those three units was issued a warning letter. The USFDA had also issued 10 Form 483 observations on one of its facilities in June. The warning letter will not impact Aurobindo much as it could shift production to its other facilities. The company has also said that existing business from this facility will not be impacted, though the warning letter would prevent it from any future approvals till the matter is resolved. The company was also named in a price-manipulation lawsuit in th