Earlier this month, Niti Aayog, the Indian government’s think tank, held a high-level meeting,

with the secretaries of all stakeholder ministries—including the Ministry of Health—present. The
agenda was simple. Boost the local manufacturing of medical devices—currently a $10
billion market.
India’s medical devices market is the fourth largest in Asia—after Japan, China and South
Korea—and is projected to grow to $50 billion by 2025, as per industry estimates. However,
while there are over 6,000 types of medical devices available worldwide, barely one-sixth of
them are made in India.
You see, in India, imports rule. About 80-90% of the medical electronics/equipment in the
country are imported, according to the industry body Association of Indian Medical
Industry (AiMED).
So import-dependent is the sector that AiMED submitted a seven-point agenda to the
Pharmaceuticals Secretary this month in a bid to ‘revive’ it. Among other points, AIMI
suggested increasing the import duty to incentivise domestic manufacturing.
One would think this pro-indigenous manufacturing move would be celebrated by the likes of
Vishwaprasad Alva, founder of Indian medical device company Skanray Technologies Pvt Ltd.
After all, Skanray launched commercially in 2011 with the aim of manufacturing devices such as
X-ray machines, ventilators and patient monitors from the ground up in India. Years before
“Make In India” became fashionable.
But now, eight years later, the Mysuru-based company is yet to fulfil its potential. The rampant
imports have hamstrung Skanray, and Alwa does not mince words when asked about the
AiMED’s push for local manufacturing. “I can’t sit with these so-called Indian manufacturers
with outdated technology and push outdated tech into the market. But I also don’t want to be
seen as somebody who is hostile to Make in India. So it’s a very tricky situation,” he says.
Skanray’s financials over the years do not make for pretty reading. It has been profitable in only
two years, and its revenue growth has been erratic—spiking only when Skanray made
acquisitions.

The biggest jump came in the year ended March 2014, shortly after the company made multiple
acquisitions, most notably that of engineering company Larsen & Toubro’s (L&T) medical
technology business in the end of 2012. Skanray’s revenue surged to Rs 115 crore ($16 million)
in the year ended March 2014 from a meagre Rs 0.49 crore ($68,200) three years prior. It was a
statement of intent. Skanray had acquired a business with Rs 145 crore ($20 million) in
revenue—20X its own turnover. “But in terms of valuation, we were 1.5 times higher,” Alva
says, looking back.
M&A
In 2016, Skanray acquired Mectron India and Cardia International in Netherlands. Cardia’s
acquisition added to their portfolio stressSKANcardi that provided vitals like pacemaker pulse
and defibrillation protection. In 2017, it had joint ventures in the US, Mexico and Brazil,
distribution agreements in Southeast Asia, Egypt, the Middle East and North Africa region. It
also launched a European R&D unit in Madrid, Spain
Today, with 750 employees, the company has more than 100,000 installations of its suite of
devices across the world. Yet, its revenue has hardly kept pace. It ended March 2018 with
revenue of Rs 109 crore ($15 million), an actual fall of 5.2% since 2014. That, Alva says, was
not due to a lack of orders, but rather the challenges in raising debt capital to help fulfil
those orders.
But large Indian medical device makers beg to differ.
Sanjeev Marjara, director of R&D at Allengers Medical Systems Ltd, the largest Indian medical
device maker by revenue, says, “We don’t see any competition from Skanray anymore in the
market. Operationally, they aren’t doing good. Revenue is one indicator, they manage to sell
products by lowering prices. But if we talk about profits, there are hardly any.”
The 12-year-old company, despite its reliance on ground-up manufacturing in India, has so far
not been able to serve as an example for other smaller companies to follow. With the
government’s “Make in India” clarion call, companies like Skanray come under the spotlight for
their contribution.
There’s pressure mounting on Skanray—from other players and from the market itself. Intent is
one thing, results, another.