A project report on

“Boom In Pharma And Health Care Sector ”

In partial fulfillment of
Master of Business Administration
2007-09

Department of Management Studies

Jai Narain Vyas University, Jodhpur

Submitted to: Submitted by:

Khandwala Integrated Swati Surana
Financial Service M.B.A (2007-09)
Jodhpur
 PREFACE

As a part of my academic curriculum, I am required to undergo summer training in any

organization at the end of the first year. The main objective of the training is to translate
the theoretical knowledge into practical life and to know what are the challenges faced by
the organization and how they tackle this problem. Knowledge is burden unless it is
translated into practical experience.

The basic purpose of the project is to know how to analyze the company’s product,
finding problems and to know how to solve these problems. This helps us to make
ourselves more aware about the position of the company in the market, segmentations of
the products.

As far as selection of the organization is concerned I got the opportunity in

KHANDWALA INTEGRATED FINACIAL SERVICES. As we know that PHARMA
AND HEALTH CARE SECTOR is a emerging sector as regards of Medical tourism,
Surrogate Mother, Stem Cell So I am given the objective to create a report on this area
and the future avenues available for this sector and the investment of Big Business houses
in this sector in large numbers. So that we the organization can attract the investors to
invest into this sector through RELIANCE PHARMACEUTICAL SIP.
This project has helped me a lot in understanding the various aspect of the investment
instrument. I hope that this knowledge will prove beneficial for me in future also.

ACKNOWLEDGEMENT
 BETWEEN THE CONCEPTION
AND THE CREATION,
BETWEEN THE EMOTION
AND THE RESPONSE,
BETWEEN THE HARD WORK
AND THE RESULT,
LIES MY THANKS TO YOU.

In the preparation of this project report, which is a part of my Summer Internship

Program (SIP), I have put in substantial effort and at the same time I found it
pleasurable doing the same. I take this opportunity to express my sincere gratitude to
Mr. Prakash.K.Singhvi (Branch Manager) KHANDWALA INTEGRATED
FINACIAL SERVICES JODHPUR for providing me the opportunity to work with
them and giving me the opportunity to work in an esteemed organization like
KHANDWALA INTEGRATED FINACIAL SERVICES JODHPUR.

He contributed in a substantial way during all stages of the preparation of this report. His
guidance at every stage of the project enabled me to successfully complete this project,
which otherwise would not have been possible without his constant encouragement and
motivation.

I am grateful and owe thanks to my Family and Hitesh for extending time &
support in technological for completion of this project.
I also express my thanks to my colleagues who have directly and indirectly
guided me with moral support to work on the project.

Company Profile
Khandwala Integrated Financial Services Pvt Ltd is in the business of shares and stocks
brokership, investment advisory, financial services and portfolio management in stock
markets, debt markets and derivatives markets. Also providing dematerialized accounts
service.

KIFS is a corporate member of National Stock Exchange. It is equipped with

sophisticated infrastructure in various cities in India and have well qualified human
resources doing research and analysis work.KIFS have a dedicated team to provide
support services to our customers.

PRODUCTS
Equity Market suits to those clients who believe in Higher the Risk, Higher the Profits.
For such clients we translate fundamental research in to practical investment advice. The
transparent online trading system of NSE and BSE, adopted by us enables the clients to
get best value out of their investments.

Through investment in Derivative Products, you can expect even higher returns. In
addition to that we are also backed by an efficient back office which provides all the
information with regards to your dealings with us and also helps us in timely pay-in and
pay-out.

 Also equipped with Prowess - leading software developed by CMIE (Centre for
Monitoring Indian Economy) a leading private sector economic research
institution of the country, which provides in-depth and essential information
regarding various companies for making better decision to thousands of
organizations since the past three decades. It is also subscribed by various
government organizations of our country.
 Digitally signed contract note available on our website.
 Client Ledger report available on our website with security password.
 Internet based trading system exclusively for ISPL Clients.

Table of Content:
  Abstract
 Introduction
 Historical perspective
 Medical tourism
 Surrogate mother
 Cord blood banking
 Lifestyle disease
 New avenues in pharmaceutical industry
 Indian Pharma Companies on Global Platform
 Initiatives in Pharmaceutical Sector
 Advantage India
 Views
 Big business houses in pharma sector
 Mutual funds in India
 Life and health insurance on up swing
 Systematic investment plan(SIP)
 Reliance SIP
 Conclusion
 Bibliography

ABSTRACT
Right from the onset of the financial year 2008 the upheavals in the market which were
being observed started to leave its height i.e. the index of 21000 touched 12600. The
bearish effect was never visualized in Pharmacy sector whereas all the other sector were
affected cyclically. The Pharma & Healthcare sector therefore always termed as defensive
sector.

The Pharma sector is the start of new era in share market as well as globally. India is now
treated as leading country in this sector round the world. With the world economy
changing scenario during last 10 years, the whole economy of the world is being
strengthened .The Indian economy has emerged and other countries are also jumping into
the world zone of “Greater Economy”.

Due to drastic changes in money market, education & increasing literacy

percentage the consciousness toward health has led to expenditure tendencies on
health & life securities. The worldwide concentration is going on towards health &
Pharma.

In the world where the research work is going on to rejuvenate the dead person the scope
of Pharma sector can be imagined. The transition period of 30 years in Indian Pharma
sector has now entered consolidation period and after that the only way is the unstoppable
boom that too realistic.

India from ages has been attracting people from different corners of world for Sandunes,
Seashore, Sunset is now attracting Medical tourist for Surgery, Stemcell, Surrogate
Mother and Science (life science) and even Sensex for Pharmaceuticals is attracting
large number of FDI's. The way our Country over whelming treating Medical Tourist
and has drawn attention of Government, the day is not far when India will become “The
world Capital of Medical Tourist.”

With such Performance of this sector and new avenue & development the day is not far
when the major chunk of our GDP and revenue would be contributed from Pharma sector.
As a result of high returns and new developments majority of big business
tycoons/houses are investing huge amount in Pharma & healthcare sector. With the new
development of Generics, Nanotechnology, Individual Treatment, Telemedicine and
Contract manufacturing & Clinical Research there is huge potential of this sector to grow
far beyond the IT Sector of India. This field is not confined to this sector only because
strong base of India’s traditional knowledge in Ayurveda, Homeopathy, Unani, Yoga, etc
are being given equal importance.

The Indians biggest problem of brain drain which was especially amongst the scientist,
doctors & IT specialist has comedown to comfortable extend due to increasing avenues
and opportunities in the country itself.

The opportunity to consolidate the growth of the Industry that happened in last 20 years
should not be lost for lack of vision and one should plan to park in the Pharmaceutical
and healthcare sector to get fruits out of sector. Conclusively one can see and forecast that
the coming era would be of Pharma sector with all booming factors.

Introduction
From ages India is land of the therapy treatments and various other ways through which
large number of patients and tourists have been attracted to India. Historical perspective
of Pharma and health care sector has been given below:

Historical Perspective

Neolithic & Bronze Age Mineral & Hot Spring visits

Middle Ages Thermal Springs

16th century “Fountain of Youth”

17th/18th century Spa

Sea & Mountain Air (TB sanitarium)
19th century

20th century “Health Farms” or “Fat Farms”

India is currently a hot medical tourism hub. State of the art equipment, technological
advances, qualified medical professionals, personalized patient care and a blend of
modern and traditional medicine has put India on the global medical tourism map.

The Indian Pharmaceutical Industry, which is estimated to be worth $ 6 billion industry

with 18% value growth in year to come , has shown tremendous progress in terms of
infrastructure development, technology base and wide range of products. Many Indian
companies maintain highest standards in purity, stability and international ‘SHE
’requirements i.e. safety, health and environmental protection, in production and supply
of bulk drugs to even innovator companies. The Indian pharmaceutical market(IPM),
currently ranked fourth in the world in terms of volume and fourteenth in terms of value,
is highly fragmented with more than 5000 players.

The sector has attained wide rangeing capabilities in the complex fields of drugs
manufacturing and technology. From simple pain killers to sophisticated antibiotics and
complex cardiac compound almost every type of drug is made indigenously. Indian firms
are arguably the worlds best in drug development of API and finished dosage. Indian
pharmaceutical market confined in the domestic and global market is given below:

The total healthcare market in India is expected to grow significantly and its contribution
to the country’s GDP will increase from 5.2% at present to 8.5% over the next ten years.
The expenditure on healthcare will more than double the year 2012 and the healthcare
spending is expected to increase from Rs 86,000 crore at present to Rs 2,00,000 crore in
the next decade, reveals a CII-Mckinsey study on healthcare.

According to the study, private healthcare will continue to be the largest component of
healthcare spending and is expected to double from 60,000 crore to Rs 156, 000 crore by
2012. Moreover, if health insurance cover becomes operative, the private spending will
further go by an additional Rs. 39,000 crore.

INDUSTRY RATIONALE

 Indian Pharmaceutical market is expected to benefit from rapid growth and reforms
taking place in the Indian economy. With increased spending of the government on
healthcare programmes, rural development and rural health improvement initiatives,
through National Rural Employment Guarantee Scheme and National Rural Health
Mission, healthcare access in rural India has been improving, which has opened
uphuge untapped opportunities to the IPM.All these factors, coupled with a
favourable shift in healthcare models in terms of promotion of medical tourism in
India, which is growing by more than 20% y-y,

 corporatisation of hospitals and pharmacies, opening up of new distribution channels

and move to more scientific methods of promotion will help the IPM maintain double
digit growth, in the vicinity of 11-13% over next 3-5 years.
 The US & European pharmaceutical markets are heading towards generics and this
move is expected to offer enormous benefits to India. Due to high priced drugs in
western world, manufacturers are pressurized from their government to control cost
and this in turn compels them to move their manufacturing base to India.

 Demand for effective medicines is rising, as the population ages, new medical needs
emerge and the disease burden of the developing world increasingly resembles that of
the developed world. The E7 countries Brazil, China, India, Indonesia, Mexico,
Russia and Turkey are also becoming much more prosperous, with real gross
domestic product (GDP) projected to triple over the next 13 years. By 2020, the E7
could account for as much as one-fifth of global sales.

 Research & Development is the key to the future of pharmaceutical industry in India.
There inconsiderable scope for Collaborative Research Partnerships (CRPs) in India.
India can offer several strengths to the international R & D community. These
strengths relate to availability of excellent scientific talents who can develop
combinatorial chemistry, new synthetic molecules and plant derived candidate drugs.
The R & D expenditure by the Indian pharma industry is less than 4% of the
industry's turnover. However, now that India is entering into the Patent protection
area, many companies are spending relatively more on R & D.

Medical Tourism

At the dawn of the 21st century, the crimson rays are smiling happily on India. The new
millennium has many economic opportunities for us, one of them being medical tourism.
For the uninitiated medical tourism refers to a tourist visiting another country with the
dual purpose of getting medical treatment, which is more affordable in the other country
and enjoying a vacation as well.
India with advanced medical services paired with her exotic natural bounties has
become a heaven for medical tourists. India medical tourism medical market is growing
by 25% annually and expected to generate revenue of 10000 crore a year by 2012. The
growth in Indian tourism market is also a boon for several associated industry like hotel,
medical, pharmaceutical industry.
With “hospitals, more like spas & spas more like hospitals” India has several
other advantage that make it a natural choice for medical treatment following are some of
them:-

 Cost effectiveness as best treatment at budget price. Health procedure across

world shows 200-800% cost difference in comparison to Indian procedure.
(Treatment cost + Travel expenses + Other expenses= 1/10 of similar
services in countries like USA, UK, and other countries.
 Availability of world-class medical services like doctors, diagnostic equipments,
hospitals.
 Lack of medical infrastructure in some of the countries is boosting india medical
industry as availability of VISA is easy in india in comparison to the other
countries.
 Zero waiting period (no waiting period for patients – appointments are fixed even
before patient arrivals. Access to top specialist on the very same day.
 With 30% annual growth in indian health industry india is
ceretanily all set to become global health destination.
 Other alternative therapy like ayurveda, homeopathy, unani, naturopathy.
 Places like USA, where people are covered under medical insurance, the cost of
treatment is so high that the Insurance companies charge a high premium
from the insurance seeker. apart from this, private healthcare is too costly
which is affordable by limited section of society is also the main cause of
medical tourist coming to India.

Procedures that are attracting medical tourist to India are:

1). Chronic/Acute: Eye surgery, Heart & circulatory, Cancer, Gynecology, In-Vitro
Procedures, Hip & Joint replacement surgery, Genito-urinary, Reproductive
Dysfunction.

2) Cosmetic: - Plastic & Reconstruction Surgery, Dental Cosmetology.

3) Preventive: - Preventive Health Checks, Dental Procedures.

Comparison of procedure Charges in India & USA –

Procedure United States India Values in Rs Values in Rs

(USD) Approx (USD)
Approx
Bone Marrow USD 2,50,000 USD 69,200 1,05,00,000 29,06,400
Transplant
Liver USD 3,00,000 USD 69,350 1,26,00,000 29,12,700
Transplant
Heart Surgery USD 30,000 USD 8,700 12,60,000 3,65,400

Orthopedic USD 20,000 USD 6,300 8,40,000 2,64,600

Surgery

Cataract USD 2,000 USD 1,350 84,000 9,000

Surgery

Tooth USD 2,000 USD 125 84,000 5,250

Impactions
Root Canal USD 1,000 USD 110 42,000 4,620
Treatment
Hip USD 13,000 USD 4,500 5,46,000 1,89,000
Replacement
Body USD 30,500 USD 14100 12,81,000 5,92,200
Contouring

Some of statistical Facts about the medical tourism in India

 95000 international patients treated at Apollo group of hospitals. With a 30%,

annual growth in India’s health industry India is certainly all set to become a
“global health destination”.
 According to CII, India has a potential to attract 1000000 health tourists per
annum, which could contribute 500 crore dollar to the economy.
 Acc. to FICCI, private hospitals earned Rs. 62000 crore in fiscal yr. 2006 and
revenue from the sector are expected to rise to 130000 crore in 2012,which
represent annual revenue growth rate of about 19% a year.
 Top Indian destinations attracting medical refugee are Chennai, Mumbai,
Ahmedabad, Bangalore, New Delhi, Jaipur. Chennai itself is attracting the largest
number of medical patient around the world and in domestic patients.
 Top Indian destinations attracting medical refugee are Chennai, Mumbai,
Ahmedabad, Bangalore, New Delhi, Jaipur. Chennai the capital of medical
refugee in India is attracting largest number of international medical tourist (45%)
 and domestic tourist(40%)i.e. rest of India and 15% from Chennai itself which
makes it worlds largest city to give shelter to the medical tourist.

Surrogate mothers: Outsourcing pregnancy in India

“After IT services, it seems it’s now the turn of babies to be outsourced from India,”
Surrogate motherhood is as an arrangement, in which a woman carries and bears a child
for another person but takes no ownership of the child born. This new phenomena is
result of infertility among the couples or physically unable to carry a fetus , lack of time
from professional life’s to give birth to there own children. The egg that contributes to the
embryo is never of the surrogate mother instead it is contributed from an anonymous
donor or the intended mother and then it is transferred to the womb of the surrogate
woman via in vitro fertilization (IVF).
Oh!!!! I can not
believe that this
my child

Some 75 per cent of the clients are NRIs from Britain, America, Japan, and Southeast
Asia and rest of them is from round the world. They come to India for mix of skilled
medical professionals, relatively liberal laws and low prices. A surrogacy cost in U.S a
minimum of $ 20000 to $250000 and whereas in India it costs $2800 to $5600.

The government of India legalized this practice in the year 2002 when most of the Asian
countries had a restriction over the practice of surrogacy. India government at present is
working on making law to ensure the protection of all the sides as they suspect that this
industry will grow in the coming year.
This business of renting a womb or reproductive tourism has a scope to grow beyond the
figures of $500 million by 2012 according to Asia Time online. Various hospitals, fertility
clinics and online network and website are working in large number to trap the
opportunity available in this industry. Pharmaceutical, medical and health insurance will
be a major gainer from this sector.

Cord Blood
Banking

Cord blood i.e. blood remaining in the umbilical cord ,donated by mothers after the birth
of their children-has been accepted worldwide as rich source of stem cells used for
transplants .

Advancement in medical research has established the use of cord blood based stem cells
in the treatment of more than 45 diseases, especially in the treatment of deadly diseases
like leukemia, lymphoma, etc…Research is also going on for using cord blood to provide
low cost effective treatment for widespread diseases like diabetes , heart attack, some
form of blindness, etc.

High birth rate and lack of any stringent government regulations are the factors favoring
the development of cord blood banking in India. With approximately 72000 births daily,
resulting in discarding of 72000 umbilical cords a day-the storage of stem cell rich blood
derived from these umbilical cords can prove to be the best possible insurance against life
threatening diseases.
The use of umbilical stem cells for therapeutic purposes can ensure lower treatment costs
and longer lives.

Benefit of cord cell banking

 India will become global health destination especially in surgical treatment

based on cord blood
 Open new doors to range of employment opportunities
 India will attract huge investment flows, which all the more help in development
of the nation

Public Vs. Private Cord Blood Banking

Cord blood banks can be primarily divided into public and private banks. While public
banks accept eligible donations to be used for anyone in need; private banks allow
families to preserve their blood for their own use for a fee ($800-$2000).
The medical community strongly supports public cord blood banking as it widens the
compass of beneficiaries from medical advances. However, since the estimated
probability of a need for cord blood stem cells within a family is 1/1500, private cord
blood banking is generally not recommended. Globally, out of 100 cord blood stem cell
banks, 75 are public banks.

Relicord- which is Reliance Life Sciences Stem Cell Banking services has established
south Asia’s first most advanced and completely automated stem cell enriched umbilical
cord blood repository. This is the first cord blood repository in the world to be accorded a
license by an official regulatory authority, Food and Drug Administration (FDA),
Government of India.

Apollo Hospitals and Cadila Pharmaceuticals have entered into an agreement with
StemCyte, Inc, the US-based world leading stem cell transplantation and therapeutics
comany, to set up a public and private umbilical cord blood (UCB) bank at Ahmedabad
with an estimated investment of $16 million.

Lifestyle Disease
With the rise of increasing income and influence of western and corporate culture India is
heading on the way of becoming the world capital of chronic diseases. Chronic disease
which are caused due to changing lifestyle, pattern of sleeping, eating disorder is on verge
to take more life of professionally competent person s in comparison to the series of
terrorist attack round the world.
Causes of Lifestyle Disease
 Lack of sleep and working hours
 Junk food and poor nutrition
 Consumption of diet rich in fat and sugar
 Lack of exercise and time constraint

 Working culture in BPO/ Call Centre

 Stress both at work place and home
 Exposure to dangerous pollutants
 Direct exposure to ultraviolet rays

 Excessive use of mind

 Lack of physical activity
 Use of computer and internet
 Hip-hop party culture

All these lifestyle disease are cause of chronic disease such as Diabetes, Hypertension,
Aids, Obesity, blood pressure, Migraine, Mental Tension,etc… At present significant
number of Indian population is suffering from theses disease
More than 300 million stressed up Indians are looking for a solution and with disciplined
lifestyle , proper sleeping, exercise, timely rest, the stressful life can be said good bye,
but what it requires is time. And in this modern world

“EVERYBODY HAS EVERYTHING, EXCEPT TIME”

With lack of time and work load these lifestyle disesase will be able to trap half of Indian
population into its vicious circle.
Relieve from all these disease can be provided only by the pharma and health care
industry as in today’s corporate life style one has limited time to swallow a medicine.
This will certernily boost and give new heights to pharma and health sector.

Some of the truth of lifestyle disease

Lifestyle disease will grow exponentially with the Indian economic growth. The growth
of life style diseases can propel India amongst the top 10 pharmaceutical market in the
world by year 2020, says global consulting firm PRICEWATER COPPERS.

 By the year 2015 India will lose $237 billion by losing professionally competent
person who are getting prone to lifestyle disease.
 By the year 2020 lifestyle disease are expected to claim 7.63 million life’s in
India.
 India is called the capital of diabetes, home to target no. of diabetic’s patients is
projected to have 30 million diabetics by 2020 of which 22% will suffer from “A”
type diabetics which is most severe one.
 People suffering from hypertension are projected to be 213.5 million in year 2025.
 Mortality rate from diabetes and heat disease is costing India $210 billion every
year and is expected to increase to $335 billion in next 10 year(WHO)
 By year 2020 amongst the Asian suffering from heart attack, 60% of them will be
Indian which will make India a world capital of heart disease
New Business Avenues in pharmaceutical industry

Contract Manufacturing

A contract manufacturer ("CM") is a firm that manufactures components or products

for another "hiring" firm. MNC pharmaceutical companies are increasingly outsourcing
their manufacturing activities to Contract Manufacturing Organizations (CMOs) for
achieving efficiencies in: cost, capacity, and time-to-market, and also to obtain a specific
expertise which is not available with them and which is available in India.
The Indian pharmaceutical sector manufactures about 400 bulk drugs belonging to
several therapeutic segments. Indian Drug Manufacturers Association (IDMA) estimates
that there are nearly 20,000 manufacturing units operating in India of which 80% of the
companies are into contract manufacturing catering to the domestic and international
markets. Many large production houses in the country are becoming USFDA compliant to
be benefited from the vast business potentiality. India currently has 75 USFDA approved
plants.

Large Indian companies like Ranbaxy- Eli Lily and Lupin-Cynamid have taken the lead
in signing major contract manufacturing agreements.
Companies like SmithKline Beecham have also already established its own
manufacturing unit in India and Wochardt India has also set up its manufacturing unit for
its nutritional products and a large part of its production facility is being used to contract
manufacture for overseas customers

Contract Research & Development

As per the report of the Chemical Pharmaceutical Generic Association, the Contract
Research business in India is valued at $100-120m was 2005 and growing at a rate of 20
25 per cent each year. India is also a preferred destination for contract Research and
Development in pharmaceuticals owing to its proven abilities in the field of Information
Technology (IT).

The pharmacy research is becoming more IT oriented and the Indian contract research
companies have started following the Good Clinical Practice (CPG) guidelines prescribed
by USFDA. Contract Research Organizations (CROs) in India offer a wide range of
services in the field of drug discovery like chemical synthesis, methodology development
in analytical techniques and process up gradation. Contract research and development in
India is undertaken in different ways:

(i) large MNCs entering into strategic alliances with subsidiaries of global
CROs- eg. Quintiles and Covance;
(ii) (ii) Global CROs and local Indian CROs entering into Joint Venture
(JV) agreements- eg. US-based Parexel and Synchron Research
Services;
(iii) Indian CROs operating independently eg. Siro Clinpharm;
(iv) (iv) Subsidiaries of Indian pharmaceutical companies operating as
independent entities, eg. Well Quest78.

There are more than ten global MNC pharmaceutical companies operating in India, who
had already made India their hub for production of APIs and finished formulations at low
costs. Other Indian pharmaceutical companies that undertake contract research on process
development for leading MNCs include: Divi’s Laboratories Ltd., (DLL), Hyderabad;
Regent Drugs, Delhi; Cadila Healthcare, Ahmedabad.

Contract Clinical Trials

Drug trials, commonly known as clinical trials, are scientific tests made on human
volunteers. Such trials are carried out in 3 phases. In the first phase, studies are carried
out on volunteers to determine the safety of the drug. In the second phase, on persons
having the disease or medical condition to determine whether the drug has some level
of therapeutic effect. In the last phase, trials are long-term studies on patients to
determine whether the drug will be truly effective in normal medical settings.
 India, a country with the largest pool of patients suffering from cancer, diabetes and
other maladies, has become the global hub for carrying out clinical trials at random.
Almost all the top pharmaceutical companies of the world have set up clinical trial
facilities in major cities, like Ahmedabad, Hyderabad, etc. Neeman Medical International,
a 100% subsidiary of Max group of companies has acquired 2 CROs in US to explore and
exploit the vast business potentiality provided to India owing to its new patent regime and
other regulatory changes made recently81.

Indian companies like Max India Ltd, have established their 100% owned subsidiary
NMI BV at Holland and have operating entity NMI worldwide to support the clinical
trials enrolment needs of pharmaceutical, biotech and medical service industry. This
contract research organization of Indian origin is able to meet the rapidly growing
demands of expeditious enrolment of appropriate patients by locating previously
untapped patient populations in key regions of the world.

Generics

According to a report by global pharmaceutical market intelligence company, IMS Health

the Indian generic manufacturers will grow to more than US$ 70 billion as drugs worth
approximately US$ 20 billion in annual sales will face patent expiry in 2008. In fact, with
nearly US$ 80 billion worth of patent-protected drugs to go off patent (including 30 of
the best selling US patent-protected drugs) by 2012, Indian generic manufacturers are
positioning themselves to offer generic versions of these drugs.

Also, there is global shift towards use of generics as governments worldwide are under
tremendous pressure to curtail steeply escalating healthcare budgets. Consequently, the
generics industry in India after capturing the US markets, is gradually making its foray
into Japan, South Africa, Europe and the Commonwealth. Indian pharmaceutical
companies with their reverse-engineering expertise, abundant investment in research
facilities and availability of skilled manpower are favorably placed in the global generic
market.

Already, Indian drug companies account for over 25 per cent of the total generic drug
applications made to the FDA of US, which accounts for over half of the US$ 60 billion
market. The US FDA's latest generic initiative GIVE (Generic Initiative for Value and
Efficiency)-aimed at increasing the number and variety of generic medicines available to
consumers and healthcare providers -- is expected to further fuel the export plans of
Indian pharmaceutical companies.

Traditional Knowledge in India

“Traditional Knowledge (TK) is essentially culturally oriented or culturally based, and it

is integral to the cultural identity of the social group in which it operates and is
preserved”. The TK matters relating to India that made news after the advent of new
patent regime and raised serious controversies and would have made resulted in
unimaginable ramifications and consequences include:

(i) USPTO providing for patent on usage of turmeric for its wound healing properties;

(ii) European Patent Office (EPO) providing patent for seeds of Neem which possess
fungicide properties since times immemorial.

The new patent regime enabled protection of TK in India through enabling legislations.
There are nearly 150,000 recorded ayurvedic, unani and siddha medicines and around
1,500 Yoga exercises which originated in India and existing for more than 5,000 years,
but Yoga exercises are being allowed to be patented in the western countries and India
also continues to be a victim of "bio-piracy” due to lack of sincerity by the western
countries in providing adequate IP protection to TK.

As per World Health Organization (WHO) findings more than 70% of the people living
in India use traditional medicine for primary health care; and.It is also being felt that
proper documentation of TK could help in checking bio-piracy.

The Ayurvedic system of medicine in India has already documented more than 35,000
Ayurvedic formulations in the Traditional Knowledge Digital Library (TKDL) and the
details of the same are being converted into Patent Application Format

More individual medical treatment

The biological make-up of everyone in this world is somehow different. Today, we know
that that is due to genetic differences. Although 99.9 percent of genes are the same in all
people, the remaining 0.1 percent can contain differences in the DNA sequences that store
genetic information.

Therefore, a particular drug can be effective on one patient and not on another patient.
Therefore, difference can be brought up between patients with the help of lab testing and
personalized care of the doctor. This will lead to the development of the different drugs,
which will definitely increase in the revenues of pharmaceutical industry.

The rising importance of diagnostics

Diagnostic procedures will continue to gain importance, allowing the earliest possible
identification of predispositions for certain diseases for effective treatment. Increasingly,
this will include disease prevention. At present, laboratory services account for an
average of just 1% of overall healthcare costs.

However, these services and the information they provide have enormous potential to
raise the efficiency of healthcare as a whole, allowing optimisation of the remaining 99%
of spending. This potential needs to be tapped. The prospects for patients suffering from
cancer would improve considerably if diagnostics were used more widely than in the
past.

Biotechnology

Together with automation and information technology, it is starting to open up new

perspectives for all areas of the life sciences, and especially for medicine. A knowledge of
the genetic differences between patients can also aid the development of new drugs.
If we know which patients will not tolerate a potential new medication, or will not
respond to treatment, these patients can be excluded from clinical trials at the
development stage.

That would enable us to pursue a number of projects that have previously had to be halted
due to side effects or low average efficacy even though excellent results were obtained in
specific patient groups. This all is possible with the help of biotechnology and India
certainly has strong control on the biotechnology area.

Global herbal market

The global herbal market, estimated to be worth US$ 62 billion,14 offers a plethora of
opportunities for the Indian pharma companies. India’s current share in the global herbal
market is just $1 billion and a huge opportunity awaits the ingenious Indian
pharmaceuticals, to be availed through innovation, patents, and trademarks. India has
enormous resources of medicinal and herbal plants.

The pre-historic knowledge of Ayurveda and its applications to cure illnesses effectively
hasn’t been explored fully by India. If this happens successfully, India could gain a very
significant competitive edge in the global market, especially in the pharma, beauty care,
and healthcare segments.

Since this traditional knowledge of Ayurveda is not available to other countries, India
could dominate in this sector. It is no exaggeration to say that an ‘Herbal Revolution’ by
India is just waiting to happen. India could truly become a global leader in the herbal
medicine category by inventing and patenting medicines for several ailments by using a
combination or mixture of herbal formulations.

Support from rising household incomes

For the next 15 years we expect average annual growth in India of 6-7%.2 Strong income
growth will broaden the middle class, an important group for foreign drugs
manufacturers, as it has considerably higher incomes at its disposal than average Indians.
Already today, nearly 60 m people in India’s middle class, with disposable incomes of
EUR 3,500 to EUR 17,000 p.a., can afford western-produced medicines. Until 2025 their
number looks set to rise to approx. 580 m (+12% p.a.), according to McKinsey estimates.
Over a space of ten years, a four-member middle-class family has seen spending on
pharmaceuticals grow five times over, to approx. EUR 170 p.a. People’s improved
income situation has also led to a growing desire to insure against illness. At this juncture,
only 4% of all Indians have health insurance, but this share should rise strongly over the
medium term. This will have a positive impact on the demand for drugs as people with
health insurance are usually more likely to obtain prescriptions than those without cover.

Globalisation has not caused traditional medicine to be abandoned but with higher
education, rising income and a change in lifestyle, western medical treatment is gaining
in importance. At present the population especially in rural areas still sees western
medicine as a stop-gap cure which is unlikely, though, to provide a lasting solution to
health problems. Today, about 70% of the population on the Indian subcontinent depends
entirely or at least in part on traditional Indian medicine which is cheaper and more easily
available than western drugs.

IT AND PHRMACEUTICAL INDUSTRY

IT and Pharmaceutical industry are inseparable. At some or the other point each other
coincide. Various areas where IT is must are biopharma, individual treatment,
bioinformatics, clinical trial data processing, telemedicine, hospital information
management system, health insurance claim processing and many more. The opportunity
is massive and healthcare industry is looking to spent $40 billion on its IT requirement in
the year 2008.

And even to take advantage of this, major IT firms such as TCS, Wipro, Infosys, Satyam,
Pantni, etc… have already planned to expand there business in pharmaceutical sector as
they know the potential of this sector.

Indian Pharma Companies on Global Platform

 Dabur Pharma received US FDA approvals to market generic version of Pfizer’s

Camptosar (Irinotecan Hydrochloride) injection. The drug is used to treat
advanced stages of cancer of the large intestine and rectum.

 Ranbaxy received US FDA approval to manufacture and market Novartis’

Diovan. The key ingredient in Diovan is valsartan. Diovan had annual sales of
USD 1.3 billion, thus becoming Novartis’ largest selling drug. The patent for the
drug expires in 2012.

 Dr.Reddy’s Laboratories received US FDA approval to market its generic

version of Novartis’ Exelon, rivastigmine tartrate capsules in strengths of 1.5mg,
3mg, 4.5mg and 6mg. Rivastigmine tartrate is used in the treatment of mild to
moderate Alzheimer’s disease as well as Parkinson’s disease. In Alzheimer’s
disease, the drug temporarily improves the brain function by boosting levels of the
chemical messenger– acetylcholine.
  Orchid Chemicals received US FDA approval for Cefpodoxime Proxetil tablets
in strengths of 100mg and 200mg. Cefpodoxime Proxetil is a third generation
cephalosporin antibiotic used to treat infectious diseases.

 Aurobindo Pharma received US FDA approval for Glyburide tablets in strengths

of 1.25mg, 2.5mg and 5mg. Glyburide belongs to a class of drugs called
sulfonylureas used to control blood sugar levels. It is used to treat type 2 diabetes

Initiatives in Pharmaceutical Sector

GOVERNMENT INTIATIVE

 As per minister of chemicals and fertilizers Ram Vilas Paswan, “we have already
taken in principle decision to create a separate department for the pharmaceutical
Sector, considering the robust growth witnessed by the pharmaceutical Sector In
the country.”

 As per the official said, “having a full fledge department exclusively dedicate to
the pharmaceutical industry would help the sector especially when export are
accounting close to 50% of the total pharma production in the country.”

 Health minister A.Ramadoss said the government is considering a bill that to

provide for accreditation of all hospital down to district level and he says that
only 2-3% Indians have any form of health insurance and in the coming Years
there will be a massive surge in it. The government has launched an Rs1.25 billion
project for scientific validation of traditional health care system of Ayurveda,
homoeopathy, unani, and siddha.

 The finance Ministry’s investment commission emphasis’s that healthcare

Delivery is already one of the largest service sector industries in India, Expects
the industry to grow and contribute upto 5% of GDP (at around Rs 240000
crores) by 2010.

 Mrs Renuka Chowdhury said that medical tourism could bring in extra Foreign
exchange worth Rs 5000-10000 crore.
  In addition tour operators have been advised to include ayurveda health
destination in their marketing venture, especially in view of increasing
popularity of ayurveda

Export Promotion Cell: An Export Promotion cell in this sector has been incorporated
with the objective of
 Boosting Pharmaceutical exports
 Function as a nodal centre
 Promotional Activities aiming at accelerating pharma exports.
 Suggestions for modifications in the EXIM Policy.
 Seminars / Workshops on standards, quality control requirements etc

Pharma Export Promotion Council ( Pharmexcil): The Pharma Export Promotion

Council (Pharmexcil) has been constituted with the objective of

Facilitation of exports of Drugs, Pharmaceuticals, Biotechnology products, Herbal

Medicines, Diagnostics.
 Export thrust to various products through workshops, conferences and seminars and
delegate visits.

Foreign Direct Investment (FDI) in Drugs and Pharmaceuticals:

 FDI upto 74% in the case of bulk drugs, their intermediate Pharmaceuticals and
formulations (except those produced by the use of recombinant DNA technology)
would be covered under automatic route.
 FDI above 74% for manufacture of bulk drugs will be considered by the
Government on case to case basis for manufacture of bulk drugs from basic stages
and their intermediates and bulk drugs produced by the use of recombinant DNA
technology as well as the specific cell/tissue targeted formulations provided it
involves manufacturing from basic stage.

Provisions of Union Budget 2007-08 for the Pharma Sector

 Weighted deduction on in-house R&D expenditure extended for a period of five

more years until March 31,2012.
 Service Tax Exemption to DCGI2 approved CRO3s offering clinical trials for
technical testing and nalysis services for testing of new drugs
 Peak customs duty reduced to 10%
 Concessional rate of 5% customs duty plus Nil CVD on specified items extended
to all research institutions registered with DSIR4
 Additional 15 imported items for R&D purposes allowed to be imported at 5%
customs duty.
 Increased budgetary allocation towards AIDS control and immunisation for Polio
ADVANTAGE INDIA.

Competent workforce:

India has a pool of personnel with high managerial and technical competence as also
skilled workforce. It has an educated work force and English is commonly used.
Professional services are easily available.

Cost-effective chemical synthesis:

Its track record of development, particularly in the area of improved cost-beneficial

chemical synthesis for various drug molecules is excellent. It provides a wide variety of
bulk drugs and exports sophisticated bulk drugs.

Legal & Financial Framework:

India has a 53 year old democracyand hence has a solid legal framework and strong
financial markets. There is already an established international industry and business
community.

Information & Technology:

It has a good network of world-class educational institutions and established strengths in

Information Technology.
Globalisation:

The country is committed to a free market economy and globalization. Above all, it has a
70 million middle class market, which is continuously growing.

Consolidation:

For the first time in many years, the international pharmaceutical industry is finding great
opportunities in India. The process of consolidation, which has become a generalized
phenomenon in the world pharmaceutical industry, has started taking place in India.

VIEWS

The CII-Mckinsey report on healthcare made the world stand up and notice the immense
opportunities that that were lying unutlised in Indian healthcare industry"
-Dr Bhaskar Shah, Director, Asian Heart Institute

The major factor driving the growth of manufacturing of diagnostic equipment and kits in
India is the wide gap of 70-80 percent cost Advantage that Indian
Labs Offer over countries like the UK and the US.
Suresh Vazirani M.D, Transasia Bio-Medicals Ltd
Parle director Schauna Chauhan (Prakash Chauhan’s eldest daughter):
“We want to drive Parle Agro beyond the beverages category. As a first step, we have
forayed into the health and fitness segment. Nowadays, Indians have become quite
health-conscious.”

Mr S. Sankarnarayanan, Fund Manager, Tata Mutual Fund

The most important reason for the software industry to take off was the Internet boom
and the resultant boom in IT spending. We see the generics market potential to be the
prime driver for pharma stocks to be out performers.

Rakesh jhunjunwal
“I think pharma boom is overdue. As infrastuture, bank, oil, if all these can perform so
high then why not pharma . See the cos, all r just doing nothing but expanding. It seemed
that our country would be the world ruler in pharma in next 5 years and I will not be
surprised if say ranbaxy some day bid for majority stake in Johnson& Johnson or Pfizer.”
Dr. Anji Reddy, Chairman, DRL, said,
"We [in India] have brilliant people who are as good as or even better than anyone
anywhere else in the world. So for next few years India will be leader in the pharma
industry as we have been in IT.”

According to the World Bank,

“The global market for medicinal plants and products includes the potential sectors of
pharmaceuticals, nutraceuticals, cosmetics, and agro-chemicals. India has enormous
resources of medicinal and herbal plants. The pre-historic knowledge of Ayurveda and its
applications to cure illnesses effectively hasn’t been explored fully by India. If this
happens successfully, India could gain a very significant competitive edge in the global
Market, especially in the pharma, beauty care, and healthcare segments. Since this
traditional knowledge of Ayurveda is not available to other countries, India could
dominate in this sector.

“We have already taken an in-principle decision to create a separate department for the
pharmaceutical sector, considering the robust growth witnessed by the pharmaceutical
sector in the country,”
Minister of chemicals and fertilizers Ram Vilas Paswan

Mr. Dilip S. Coulagi, Chairman & Managing Director, Sigma Labs Ltd
The pharma industry, or rather the entire healthcare fraternity in India stands on the
threshold of great potential growth, since we have the manpower to get the world's jobs
done effectively and successfully at minimum cost, and we are farther along the learning
curve than most emerging countries..

Mr. K.HARI RAM, Country Manager, Galderma India Pvt. Ltd.

“India is on the move. Interesting transformation is taking place in the country. As such,
the Indian pharmaceutical industry is rated high among the developing countries for
quality, technology and wide range of products. It is therefore, an opportune moment and
a commendable initiative to invest in this sector”.
Mr. J. P. N. SINGH, Director, Galpha Labs Ltd.
‘In India, we are just starting to have the medical expenses reimbursement by Companies
like Mediclaim.Indian Pharma Companies would continue to introduce new products
which are patent expired & also try to consolidate their base quickly. The Indian Pharma
Industries anticipated growth is greater than 10% because of Government open policy.
Nowadays, people are more conscious on health management & lifestyle drugs have
come into focus. Special segments including Gediatric practice is gaining momentum.
People will be more conscious on spending for medicine & health e. g. prophylactic like
vaccines would get increased use.”

Mr. C. L. Rathi, Managing Director, Advanced Enzyme Technologies Ltd.

The Pharmaceutical industry & Biotechnology industry are at a cross road of new
opportunities based on business creation & Innovation. Indian Entrepreneurship is world
class. Many NRI's have shown their abilities abroad & several have shown it in India too.
Now it is a time to create new history & create "Made In India" Brand like today many
Japanese Companies have shown the world for Japanese Companies & products. We
must all seat together & work out
A plan to make it happen.

BIG BUSINESS HOUSES IN PHARMA SECTOR

ICICI Venture is planning to float a company that will buy medium-sized hospitals and
pharmacy chains and act as a holding company for the fund’s investments in the booming
healthcare sector.

DR Reddy’s Laboratories (DRL) is eyeing an entry into health insurance and pharma
retail as part of its ambitious plan to diversify in the health business. The growing
business opportunities in both these segments could be the trigger.

World Bank group member International Finance Corporation on Monday said it

will invest Rs 55 crore (14 million dollars) in Delhi-based Rockland Hospitals to support
its expansion plans.

Anil Ambani-owned ADAG is entering the personalised healthcare services. Medybiz,

part of the group’s Reliance Health Ventures, is learnt to be in the final stages of
developing a home-based disease management programme that aims at addressing
chronic ailments. Touted to be the first of its kind in India, the programme is based on a
partnership between physicians and their patients and is serviced by an expert panel of
medical and para-medical professionals.

Real Estate Players in Healthcare

 DLF inking a 26:74 joint venture with Fortis Healthcare for setting up hospitals in its
200-acreplusintegrated townships across the country, at an investment of around US$ 1.5
billion. The JV plans to set up a chain of 200-450 bed hospitals in 31 cities in India
within three to five years.

Fortis’s Lucknow MediCity, is being set up in Ansal’s 1,500 acre up coming mega
township.

Hinduja Group and Limitless LLC, the realty arm of Dubai World, are putting in about
US$ 1.1 billion in their 51:49 JV to build hospitals and medicare cities

Ambuja Realty Development Ltd (ARDL) plans to develop a couple of feeder

hospitals in Siliguri(North Bengal) and Bardhaman (South Bengal) for its proposed multi-
specialty hospital in Kolkata. ARDLhad formed a joint venture — Neotia Elbit
HospitalVenture Ltd — with the Elbit Group of Israel.
MUTUAL FUNDS IN INDIA

LIFE AND HEALTH INSURANCE “ON A UPSWING”

The Indian insurance sector is on a bull run since last 3-4 years with the increasing
general awarness, literacy, and health consciousness increasing high disposable income ,
major demographic shift of the population to urban cities and limited coverage currently
in health sector, entry of private player with unique and emotional marketing strategy.

Major foreign insurance companies are operating in collaboration with Indian hospitals
are BLUE CROSS, BLUE SHIELD, CIGNA INSURANCE, AETNA INSURANCE.
SOCIETE GENERALE has entered into ajoint venture with INDIA BULLS
FINANCIAL SERVISES. ADAG being a TPA is entering into health insurance through
MEDI ASSIST .many Indian and foreign players are enering into health insurance to trap
the untrapped market segment and population.

Increasing health insurance policies is direct boom to PHARMA AND HELTH CARE
INDUSTRY as expenditure on hospital bills increase to multifold of the normal expenses.
Currently the total expenses of public in the hospital is Rs. 6000 crore which will increase
upto Rs. 120000 crore with the increase in the cost of medical treatment.--

SYSTEMATIC INVESTMENT PLAN

The Systematic Investment Plan (SIP) is a simple and time honored investment strategy
for accumulation of wealth in a disciplined manner over long term period. The plan aims
at a better future for its investors as an SIP investor gets good rate of returns compared to
a one time investor.

What is Systematic Investment Plan

 A specific amount should be invested for a continuous period at regular intervals
under this plan.
 SIP is similar to a regular saving scheme like a recurring deposit. It is a method of
investing a fixed sum regularly in a mutual fund.
 SIP allows the investor to buy units on a given date every month. The investor
decides the amount and also the mutual fund scheme.
  While the investor's investment remains the same, more number of units can be
bought in a declining market and less number of units in a rising market.
 The investor automatically participates in the market swings once the option for
SIP is made.

SIP ensures averaging of rupee cost as consistent investment ensures that average cost per
unit fits in the lower range of average market price. An investor can either give post dated
cheques or ECS instruction and the investment will be made regularly in the mutual fund
desired for the required amount. SIP generally starts at minimum amounts of Rs.1000/-
per month and upper limit for using an ECS is Rs.25000/- per instruction. For instance, if
one wishes to invest Rs.1, 00,000/- per month, then they need to do it on four different
dates.

Lets take an example:

 An investor, ‘Rahul’ wants to invest in fund ‘X’ which can be an equity, income or
gilt fund.

 The policy of fund ‘X’ for entering in an SIP is that the investor will have to issue
6 post-dated cheques of Rs 500/- in case of monthly option or 4 cheques in a
quarterly option. The minimum investment for all its schemes is Rs 5,000. ‘Rahul’
issues 6 post-dated cheques of Rs 500/- each in the name of fund ‘X’, with the
first cheque being dated as on 7th May 2001.

 Now in the month of August 2001 ‘Rahul’ wants to change his SIP structure from
Rs 500/- to Rs 1,000/-. In this case he will have to intimate the fund and will have
to fill a new SIP form issuing news post-dated cheques of Rs 1,000/- each.

 ‘Rahul’ is investing in three different schemes of fund ‘X’. In two of the schemes
‘Rahul’ is the first holder and in the third scheme his wife is the first holder. In
this case he can fill a common SIP form where he is the first holder and where his
wife is the first holder he will have to fill in a new SIP form.

 In the month of September 2001 ‘Rahul’ wants to exit from the fund. He will have
to just give a redemption request to the fund wherein his units will be redeemed
and his remaining post-dated cheques will be returned back to him irrespective of
whether he has completed his minimum investment in the fund.

Investing in SIPs is also known as Rupee cost averaging. The advantage of rupee cost
averaging is that the Net asset value (NAV) is averaged out, as the investor will be
entering the fund at different NAVs, which may be higher or lower depending on the
market condition.
Lets take the example of ‘Rahul’ wherein he has started investing in units every month
since he issued the first cheque on 7th May 2001. In this example we assume that he does
not change his SIP structure and also does not redeem the units.

Investment in fund 'X' of Mr. Rahul

Period Investment(Rs) NAV(Rs per unit) Units allocated

7th May'01 500.0 10.0 50.0
7th June,01 500.0 13.0 38.5
7th July'01 500.0 10.5 47.6
7th Aug'01 500.0 9.5 52.6
7th Sep'01 500.0 8.0 62.5
Total a=2,500 b=251.2

Actual average NAV (Rs.) = Rs 10.2 per unit

NAV for Rahul= Rs 9.95 per unit (a/b)

The above table shows clearly how rupee cost averaging works and how it was beneficial
to ‘Rahul’. The actual average NAV of a fund is Rs 10.2/- per unit, but the average NAV
for ‘Rahul’ is Rs 9.95/- per unit, which is lower than the current NAV.
An investor who is not having a lump-sum amount to invest and also does not want to
take much risk on his investment should always select a ‘Systematic Investment Plan’
option. This will enable him to invest regularly i.e. improve investing discipline. Also, the
investor stands to benefit from rupee cost averaging.
Even for the cash-rich, SIPs reduces the chance of investing at the wrong time and losing
their sleep over a wrong investment decision. However, the true benefit of an SIP is
derived by investing at lower levels. Other benefits include:

1.Discipline

The cardinal rule of building your corpus is to stay focused, invest regularly and maintain
discipline in your investing pattern. A few hundreds set aside every month will not affect
your monthly disposable income. You will also find it easier to part with a few hundreds
every month, rather than set aside a large sum for investing in one shot.

2. Power of compounding

Investment gurus always recommend that one must start investing early in life. One of the
main reasons for doing that is the benefit of compounding. Let’s explain this with an
example. Person A started investing Rs 10,000 per year at the age of 30. Person B started
investing the same amount every year at the age of 35. When they attained the age of 60
respectively, A had built a corpus of Rs 12.23 lakh while person B’s corpus was only Rs
7.89 lakh. For this example, a rate of return of 8% compounded has been assumed. So the
difference of Rs 50,000 in amount invested made a difference of more than Rs 4 lakh to
their end-corpus. That difference is due to the effect of compounding. The longer the
(compounding) period, the higher the returns.

Now, instead of investing Rs 10,000 each year, suppose A invested Rs 50,000 after every
five years, starting at the age of 35. The total amount invested, thus remains the same --
Rs 3 lakh. However, when he is 60, his corpus will be Rs 10.43 lakh. Again, he loses the
advantage of compounding in the early years.

3. Rupee cost averaging

This is especially true for investments in equities. When you invest the same amount in a
fund at regular intervals over time, you buy more units when the price is lower. Thus, you
would reduce your average cost per share (or per unit) over time. This strategy is called
'rupee cost averaging'. With a sensible and long-term investment approach, rupee cost
averaging can smoothen out the market's ups and downs and reduce the risks of investing
in volatile markets.People who invest through SIPs capture the lows as well as the highs
of the market. In an SIP, your average cost of investing comes down since you will go
through all phases of the market, bull or bear.

4. Convenience

This is a very convenient way of investing. You have to just submit cheques along with
the filled up enrolment form. The mutual fund will deposit the cheques on the requested
date and credit the units to one’s account and will send the confirmation for the same.

5. Other advantages

·There are no entry or exit loads on SIP investments.

·Capital gains, wherever applicable, are taxed on a first-in, first-out basis.

Reliance Systematic Investment Plan

Invest as little as Rs. 100 per month.

Welcome to Reliance Mutual Fund

Just as drops of water make an ocean, small but regular investments can go a long way in
building wealth over time.This way you grow step by step. It’s always prudent to invest
with a long term horizon in mind. Small but regular investments go a long way in
creating wealth over time. Reliance Systematic Investment Plan helps you achieve just
that. It is an investment technique where you deposit as little as Rs. 100 regularly every
month into the mutual fund scheme at the then prevailing NAV (Net Asset Value), subject
to applicable load.
No need to time the markets

Imagine, if you could always pick the right time to buy and sell.
However, timing the market is a time-consuming and risky task.
Through disciplined, regular investments you can stop worrying about when and how
much to invest. In short, it eliminates the need to actively track the markets.

Lower cost per unit

Since your investments are spread regularly over a period of time, buying fewer units
during rising markets and buying more units during falling markets reduces the average
cost per unit of your investments - this concept is known as Rupee Cost Averaging.

Illustration - Rupee Cost Averaging

Say you have opted for Reliance Systematic Investment Plan, investing Rs. 100 every
month from April 2004 to September 2004 in a diversified equity fund. Now check the
average purchase cost per unit of your investments. It would be lower than the average
NAV of your investment over 6 months. To see how your average purchase cost per unit
is lower than the average NAV see the table along side.

Date NAV (Rs.) Units Amount (Rs.)

12/4/04 80.52 1.24 100.00
10/5/04 81.49 1.23 100.00
10/6/04 71.87 1.39 100.00
12/7/04 72.64 1.38 100.00
10/8/04 81.74 1.22 100.00
10/9/04 87.49 1.14 100.00
Total 475.75 7.60 600.00
Average Cost 78.91
Average Price 79.29

Average Cost = Total Cash Outflow / Total Number of units = Rs. 600 / 7.60 = Rs. 78.91

Average Price = Sum of all NAVs at which you have invested / Number of months of
investment = Rs. 475.75 / 6 = Rs. 79.29 Average Cost < Average Price
Note: Above table uses historical NAVs for illustration purpose. Past NAVs of a scheme
are no indicator of future NAVs.

Start early - The power of compounding

Suppose A & B invest Rs. 100 every month earning interest @ 8% p.a. on a monthly
compounding basis. A starts at the age of 25 years & B starts at the age of 35 years. Both
of them invest for 5 years (Rs. 6000) & hold their investments till 60 years of age. A’s
investment would have appreciated to approx. Rs. 74,430 whereas B’s investment would
have grown to approx. Rs. 34,475 only. Thus, A’s investment would have almost doubled
by just starting earlier than B.

Achieve your financial goals

Reliance Systematic Investment Plan is an effective tool for financial planning. Be it your
child’s education, marriage or buying a home. With Reliance SIP, you can choose a
pertinent regime and achieve your goals, systematically. To see how you can achieve your
goals see the Reliance Vision Fund and Reliance Growth Fund table along side.

Reliance Vision Fund

SIP Return as on June 30, 2007

Period 1 Year 3 Year 5 Year Since inception

SIP Start Date 01/07/06 01/07/04 01/07/02 10/08/1995

Current NAV (As on 30/03/2007) 207.32 207.32 207.32 207.32

Total No. of units accumulated 70.17 320.24 985.81 6940.15

Total Amount Invested 12000.00 36000.00 60000.00 141000.00

 Present Value 14548.29 66391.35 204315.59 1438832.21

Yield 44.25% 44.98% 51.89% 36.28%

Present Value in invested in Index 14134.31 61243.34 154930.70 518565.80

Yield From Index 36.73% 38.51% 39.50% 20.68%

Past performance may or may not be sustained in future.

Reliance Growth Fund

SIP Return as on March 30, 2007
Period 1 Year 3 Year 5 Year Since inception
SIP Start Date 01/07/06 01/07/04 01/07/02 08/10/95
Current NAV (As on 30/03/2007) 307.46 307.46 307.46 307.46
Total No. of units accumulated 47.70 226.89 813.34 5971.72
Total Amount Invested 12000.00 36000.00 60000.00 141000.00
Present Value 14667.34 69758.92 250068.42 1836064.59
Yield 46.44% 49.03% 61.26% 40.05%
Present Value in invested in Index 14134.31 61243.34 154930.70 518565.80
Yield From Index 36.73% 38.51% 39.50% 20.68%

Past performance may or may not be sustained in future.

How to invest?

 Select Reliance Mutual Fund schemes of your choice.

Under the Reliance Systematic Investment Plan, you can choose from a range of
equity and debt schemes which offer SIP.

 Investment periodicity - You can choose to make your investment on a monthly or

quarterly basis.

 Minimum investment amount - Monthly SIP Option - 60 instalments of Rs. 100/-

each or 12 instalments of Rs. 500/- each or 6 instalments of Rs. 1,000/- each and
in multiples of Re. 1/- thereafter. Quarterly SIP Option - 12 instalments of Rs.
 500/- each or 4 instalments of Rs.1,500/- each and in multiples of Re. 1/-
thereafter. The first SIP instalment could be submitted on any working
day.However, the subsequent instalments can be dated 2nd, 10th, 18th or 28th of
every month/quarter. You can choose a day convenient for you. However, only
one SIP transaction per month/quarter per folio is permitted.

 Investment method - The SIP facility can be availed by :

a) Electronic Clearing Service (ECS) or Direct Debit mandate, wherein the
investor will have to give a debit mandate along with one signed cheque from his
Savings Bank account.
b) Issuing Post-Dated Cheques (PDCs). (Rs.100 SIP can be processed only
through Electronic Clearing Service (ECS) or Direct Debit).

Investment Objective :
Reliance Vision Fund and Reliance Growth Fund aims to achieve long-term growth of
capital by investment in equity and equity-related securities through a research-based
investment approach.

Conclusion
With the detailed and analytical study of our research team which was carried out under
the guidance of the khandwala group ahemdabad. Our studies show that for any sector to
be successful it needs to have the perfect ingredients which can pace up the sector and
take it new heights. Pharma and health care sector is perfect mix of ingredients which
will take this sector to new horizons. More over pharma and healthcare is the only sector
in the industry which always has new things to offer with detailed research which often
attracts the attention of general public. Within last few years only the pharma and health
sector has shown May reforms and new findings. With in our research period itself we
have seen may new happening in this sector which is attracting the attention of investor to
invest in it through share market or FDI. India is heading high on this sector on the basis
of medical tourism which will definitely turn out to be a boon for our pharma sector. New
research carried out in the field of stem cell , drugs related to AIDS , cancer, diabetics
which making Indian industry reckon on globe. It is seer privilege that bill Clinton
foundation is buying maximum of its drugs from Indian companies, which tell the
importance of this sector.
Therefore pharma and health care sector has perfect recipe ingredients to be part of your
portfolio which will give the most benefits in the coming years. So invest in the right time
before it is too late.

“But we have fear”

More than 95% of small investors go for buying stock at the last wave of market. Many
of the investor holding stock of that booming sector, quit at very first phase of the market
boom and re- enter at the last wave.
 “THEN WHAT SHOLD BE DONE”
Volatile market dilemma for the decision on the fresh investment option, thinking of
investing now or wait for the future correction and experience of the topmost expert and
analyst going wrong on the market mostly leads to missed opportunities. In such
situations one can without directly entering to stock market put money in mutual funds
which has pharma and health care as schemes. Investment in mutual funds should be
through SIP (SYSTEMATIC INVESTMENT PLAN) + FREE LIFE INSURANCE

Bibliography
Websites

 www.capitalmarket.com
 www.business-standards.com

 www.pharmaexpress.com

 www.pharmabiz.com

 www.mutualfund.com

 www.reliancemutualfund.com

 www.drl.com

 www.indianpharma.com

 www.timesofindia.com

 www.biotec.com

 www.fertilizerindia.gov

 www.birlalifesun.com
  www.utimutualfund.com

Magazines

Biopharma

Mutual fund India

Capital market