Biocon - Kiran Mazumdar Shaw's Entrepreneurial Dream
Abstract: Biocon India (Biocon), the number one biotech company in Asia in terms of
revenues and market capitalization, was founded in the backyard of a suburban house in
Bangalore in 1978 as a small operation of enzyme extraction. The woman behind Biocon -
Kiran Mazumdar Shaw (Kiran) who dreamt of starting her own business with just Rs.
10,000 in hand and a degree in brewery - is now the richest woman in India. The case study
describes how Kiran recognized the future potential of biotechnology industry when not
many people in India knew about it. It describes in detail the challenges faced by Kiran in
terms of gathering resources when she launched her biotech start-up. It discusses how
Kiran's firm determination and belief in herself helped in overcoming the various
challenges she faced.
The case then examines how Kiran exploited the opportunities in the fast growing biotech
industry in India and the major steps she took to grow Biocon's business. The
entrepreneurship and leadership skills of Kiran are also discussed.
Businesswoman of the Year 2004
In November 2004, Kiran Mazumdar-Shaw (Kiran), the Chairperson and Managing
Director of Biocon India Limited (Biocon) received the 'Businesswoman of the Year
Award,' from 'The Economic Times of India, a leading Indian business daily. This award
was to be given to a person who "was global in nature and would have shareholders' good
uppermost in mind. The person should have followed her heart and vision relentlessly,
broken all glass ceilings and pioneered the cause of women in business. It symbolized the
increasing importance of the role of women in the Indian business arena. One of the most
successful businesswomen in India, Kiran had received several awards during her career of
over 25 years.
She founded Biocon as an enzyme extraction company in a rented garage in 1978. By 2004,
Biocon had emerged as the #1 biotech company in Asia, and #16 in the world in terms of
revenues and market capitalization. The company made its initial offer of shares to the public
in March 2004. The shareholders earned handsome returns on their investments as the stock,
which was offered at Rs. 315, touched a high of Rs. 780 in early November 2004.
Reportedly, Kiran had to break through the 'glass ceiling' effect on several occasions being a
woman entrepreneur in the traditional Indian society.
She believed that Indian women can do well in business even if they don't belong to a
business family or have political influence or immense wealth. Kiran believed that women in
India were not meant for only certain kind of jobs like teacher, nurse or personal secretary,
or for running a small or cottage industry at the most. She considered herself a representative
of the modern women who could work shoulder-to-shoulder alongside men and build mega
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businesses. Expressing a deep desire for equality, she said in her award acceptance speech, "I
do hope that in the not-too-distant future, there will be one award for men and women alike -
the Businessperson of the Year Award."
The Entrepreneur
Kiran was born and brought up in Bangalore in the state of Karnataka, India. She hailed from
a middle-class family, which encouraged her to pursue higher education. Following the
footsteps of her father, who was chief brew-master in United Breweries, she went to Ballarat
College in Melbourne, Australia, to specialize in Malting and Brewing Technology to
become India's first woman brew-master. Kiran came back to India in 1975 expecting to get
lucrative job offers. However, she did not receive any. Though she possessed the required
technical qualifications, her chosen profession was completely male-dominated one. After
staying for two years as a consultant in India, Kiran went abroad and found a job in the UK.
There she met Leslie Auchincloss (Auchincloss), the owner of Biocon Biochemicals Limited,
an Ireland-based company. Auchincloss was planning to start a business in India. The Irish
company wanted to establish its operations in India to produce simple bio-products from
indigenous raw materials.
The Growth of Biocon
Biocon started with the manufacture and export of Papain, a plant enzyme, and Isinglass, a
marine hydrocolloid, which are key products for the brewing industry. Within two years,
Biocon established a steady flow of exports to Ireland. As the offtake of the company's
products by Ireland grew, Biocon's manufacturing activity was shifted from the rented garage
to a 20-acre site near Bangalore city in 1983. Kiran was not content with the steady growth in
the product offtake by the Irish company. In 1984, she decided to recruit a team to commence
research and development (R&D) in new areas of enzyme technology.
The Leader
Biocon emerged as the #1 biotech company in Asia and #16 in the world in terms of its fiscal
2003-04 revenues. For the fiscal year 2003-04, the company recorded net revenues of Rs
5018.824 mn, almost twice the previous year's figure, and a net profit of Rs 1246.726 mn. In
the past 25 years, the company had evolved from a maker of enzymes to a major
pharmaceutical enterprise, producing everything from insulin to antibodies. On March 11,
2004, the company launched its initial public offer (IPO) of 10 million equity shares of Rs 5
face value at a price band of Rs 270-315. With this, Biocon became the first biotech company
in India to go public.
The IPO was oversubscribed by 33 times, indicating the confidence of investors in Biocon. In
December 2004, Biocon's average market capitalization between April 01, 2004 and
September 30, 2004 stood at Rs 54 bn...
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Looking Ahead
Without resting on her past laurels, Kiran has moved onto even more challenging ventures of
developing insulin and drugs that can cure cancer. With 120 mn diabetic patients worldwide
and 30 mn in India, diabetes had emerged as an important area for disease research. Biocon,
through its subsidiary - Clinigene, embarked on a longitudinal research program in Type II
diabetes.24 In the latter half of 2004, Biocon launched recombinant human insulin under the
brand name 'Insugen.' The product pitted Biocon against leading multinationals like Eli
Lilly25 who had already lowered prices...
