Mukesh Ambani Loses Top Spot as India’s Richest to Shanghvi

Dilip Shanghvi, who started an Indian pharmaceutical company more than three decades ago selling a single drug, has overtaken oil refining tycoon Mukesh Ambani to become India’s richest person.

Shanghvi is founder and managing director of Sun Pharmaceutical Industries Ltd., India’s biggest drugmaker by market value. He had a net worth of $21.6 billion, according to the Bloomberg Billionaires Index. Ambani, who’s been the country’s wealthiest since the inception of the Bloomberg index in March 2012, had a fortune of $21.5 billion as of the end of the trading day on Wednesday.

Shanghvi started his company after graduating from the University of Calcutta in 1982, and the firm emerged as a pharmaceutical giant with research for new drugs and a string of acquisitions. The stock extended Wednesday’s 6.7 percent gain and added 3.2 percent on Thursday to reach a new high of 1,038.75 rupees at the close in Mumbai. Ambani’s Reliance Industries Ltd., which runs the world’s biggest refining complex, lost 0.3 percent, falling for a second day.

“There’s a lot of up and coming new money which is extremely big and powerful, and health care is definitely part of that conversation,” said Mark Matthews, head of Asia research and a managing director of Bank Julius Baer & Co. in Singapore, part of Switzerland’s third-largest wealth manager.

Frederick Castro, a spokesman for Sun Pharma in Mumbai, didn’t respond to a call and an e-mail seeking comment. Reliance Industries spokesman Tushar Pania also didn’t respond to an e-mail seeking comment.

More Stable

Sun Pharma’s 2.2 trillion rupee ($35 billion) market capitalization makes it larger than its three biggest Indian competitors combined.

Shanghvi, who’s also the world’s richest pharmaceutical billionaire, added $4.5 billion to his fortune this year, making him fourth-wealthiest in Asia, according to the Bloomberg Billionaires Index. Ambani’s net worth has increased $153 million since the start of 2015.

“Shanghvi’s business is far more stable than Reliance’s business model,” said Hitesh Mahida, an analyst at Antique Stock Broking in Mumbai. “Reliance’s business is highly dependent on commodities prices. On the other hand, Shanghvi has a good pricing power over most of the products which he sells, whether it’s in the U.S., in India, or outside.”

Wealth Breakdown

The majority of Shanghvi’s wealth comes from his 60.8 percent stake in Sun Pharma. He also owns shares of Sun Pharma Advanced Research Co., Natco Pharma Ltd. and Bio Light Israeli Life Sciences Investments Ltd.

Last month, the billionaire agreed to purchase 23 percent of Suzlon Energy Ltd., Asia’s second-biggest wind-turbine maker, for 18 billion rupees. In April 2014, Sun Pharma also agreed to buy competitor Ranbaxy Laboratories Ltd. for $3.2 billion from Japan’s Daiichi Sankyo Co.

Shanghvi has been successful in expanding Sun Pharma because of his ability to pick the right markets, Mahida said.

“He’s much ahead of others when it comes to predicting what will happen five years down the line,” he said, citing diabetes and cardiac medications, which have become sizable businesses. “He starts preparing for that, and others seem to follow him.”

Shares Jump

Sun Pharmaceutical shares have risen 26 percent this year, compared with the 0.7 percent decline in Reliance. The benchmark S&P BSE Sensex index added 7.1 percent.

The value of Reliance Gas Transportation Infrastructure, a closely held pipeline company owned by Ambani, has also been hurt by a glut in the oil market that drove crude prices almost 50 percent lower in 2014.

Ambani is the elder son of the late Dhirubhai Ambani, who founded Reliance Commercial Corp. to trade spices and yarn in 1959 and built an empire with businesses ranging from textiles to petrochemicals.

Ambani and his brother Anil fought for control of the group after their father died in 2002 without leaving a will. They split the family business three years later in a settlement brokered by their mother.

Anil Ambani has a fortune of $5.4 billion, according to the Bloomberg index.

“There’s a shift in the driver of economies away from heavy industries, deep-cyclical industries, the kind of things that powered the global economy in the past 10 years,” Matthews said. “Going forward, the growth drivers are softer: technology, health care, the more innovative things.”

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