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December 18, 2009

Forbes India profile of Opto Circuits

Forbes India has a profile of Opto Circuits, probably the only pure play listed medical devices company in the country. The company's stock incidentally has appreciated 10 times since January 2005.
Until now, Ramnani has made his living, mostly by selling “non-invasive” medical devices like electronic patient monitors and medical sensors. But it is Opto’s “invasive” product line, stuff like stents and balloons that go into patient’s bodies, which holds significant promise.

...The second reason Ramnani is where he is, is because he made some smart acquisitions. Apart from EuroCor in the invasive medical devices category, Opto acquired Bangalore-based companies Devon and Ormed. In the non-invasive category, which is where Opto started, Ramnani acquired Hindustan Lever’s digital thermometer division, the patient monitoring business at US-based Palco Labs in 2002 and Bangalore-based Altron Industries. In 2008 he acquired US-based maker and distributor of patient monitoring devices, Criticare Systems, for $70 million.

...Its decision to move back manufacturing of Criticare products from Taiwan (where it was being contract-manufactured) to Bangalore has already given it a 20 percent saving in costs. It also has plans to start manufacturing stents in India, an ambitious task no doubt, but one that can help it bring down the cost of each stent below its global counterparts.

...Continued investments in R&D — 12 percent of its income in 2009 alone — are beginning to pay off. Its drug-eluting coronary balloon, DIOR, launched in January this year was the first of its kind in the world. The company says DIOR’s potential market is 40 percent of the overall stent market with 25 percent coming from patients whose existing stents start failing and 15 percent from those who develop infections around an implanted stent.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at