Dilip Shanghvi, Sun Pharma promoter, a pharma maven with midas touch

Investors could do well by emulating pharma baron Dilip Shanghvi’s investments as he picks up stake in listed companies in India. He seems to be having the Midas touch.

The stock of Israeli firm Taro Pharma, which Sun Pharma finally acquired controlling stake in 2010, has gained 24 times since 2007 when Sun first announced a merger. Shanghvi’s stake in Hyderabad based Natco Pharma, picked up in 2011, has grown eight-fold in value today.

The stock of Ranbaxy, which had been underperforming the Street, has gained 73% since Shanghvi’s flagship firm Sun Pharma announced its acquisition last April. And, ever since Shanghvi played the white knight for Suzlon, the company’s stock has appreciated 42%.

The only investment which has not yet borne fruit for Shanghvi is his stake in BioLight Israeli Life Sciences Investments, which is listed on Tel Aviv Stock Exchange. The stock is down 40% since Shanghvi first picked up stake in it in August 2008.

Meanwhile, the benchmark index of Israeli stock exchange has gained 30% during this period. Most of these investments were made when target companies were in distress and struggling to make profits. Shanghvi, who once specialised in identifying target pharmaceutical companies, has now moved beyond that space with the investment in wind energy firm Suzlon.