India is the place where the world has to invest: Purnendu Chatterjee (Interview)

NEW DELHI - Global investor Purnendu Chatterjee has identified life science as an area where he foresees great potential for investment in India, but with a totally different model on new drug discovery from what has been adopted by the developed world.

“India and China have 2.5 billion people. If we figure out how to design drugs that are not using the model of the US drug discovery system, then we can even solve the world’s problems,” said the founder of The Chatterjee Group, based in Mumbai and New York.

“We should create a model that leverages the base of India and China and creates a very low-cost drug,” Chatterjee, an associate of legendary investor George Soros, told IANS in an interview.

“We are investing in life sciences. But what we are not doing is investing in retail. I don’t want to invest in every place — just knowledge-based industries — anywhere that we think new knowledge can be created for global use.”

He declined to share numbers.

But his group already has a company in the area called TCG Lifesciences, with its base in India, Europe, Japan and the US, which also has a tie-up with pharmaceutical major Pfizer to develop a portfolio of drug molecules.

According to Chatterjee, an alumnus of the Indian Institute of Technology at Kharagpur in West Bengal, India was the place to be for global investors, as it offered several avenues of investment where they can perform faster, better and cheaper.

“I have seen many Indian companies, where return of equity is in excess of 20 percent, he said, adding: “India is the place where the world has to invest — to protect not just ageing population but also their trillions of dollars of wealth,” he said.

“About five percent of global wealth should be invested in India. If it is not there, one is missing out on a huge big opportunity for protecting and growing your retirement fund.”

Citing himself as an example, a first-generation entrepreneur, Chatterjee said potential Indian enterprises also needed seed capital for small and mid-sized operations as capital from overseas would only come for large projects.

“There is plenty of domestic money. Unfortunately financial institutions in this country are debt-oriented. What entrepreneurs need is equity, as traditionally, angel funding is available — like Marwaris and Gujaratis funding relatives or friend,” he said.

“But what is not there is outside those business communities. If I am a Bengali, I have nowhere to go. Because my father was a lawyer, he did not have enough savings to give me money to be an entrepreneur.”

According to Chatterjee, who is also a major investor in Haldia Petrochemicals in West Bengal, it mattered neither to him nor the poor person at what rate India was growing, but in his opinion the country was expanding at a rate faster than China’s.

“I think India is de facto already the fastest-growing economy. We do not count the black economy — at what rate that is growing. And we don’t know at what rate China is actually growing,” he said.

“As long as India is growing at 8-10 percent, this is good. We are not in a league table. Nobody is going to give us an award for growing 9.5 percent as opposed to 9.3 percent.”

(James Jose and Sakshi Gulati can be reached at biz@ians.in )