Himalaya Drugs plans to raise money through the debt route to finance its new R&D center in Bidadi at a cost of Rs. 165 crore. According to Himalaya Drugs CEO Mr. Ravi Prasad, the company prefers debt rather than equity to allow it to keep its partnership structure.

"As a private company, our ethos is different," he said. "Decisions are faster this way and there is no need to cater to pressures of quarterly results (syndrome)." The nature of the business of the 74-year old company is such that it also makes it less appealing to cater to demands of quarterly results.

Himalaya invests a great deal in R&D and products take 8-20 years to finally be launched in the market after toxicity studies, clinical trials, etc, are done. "We don't look at R&D as an expense; it is amortised over several years," Mr Ravi Prasad said.

Pointing to one of the company's oldest and most popular products Liv.52, he said that it had been around for decades and was still earning revenues.

As of now, all research, testing, and clinical trials are being done at the company's 30-year old R&D unit - which is upgraded every two years or so, Mr Ravi Prasad said.

Once work moves to the new facility, this one too will be upgraded to FDA norms, he said. The Bidadi facility - work was expected to start there in November also follows stringent norms. For instance, the water used will be Cauvery water and not groundwater which is heavily laced with pesticides, said Dr. S.K. Mitra, head R&D.

The center will also source some raw material from farmers in and around Bidadi, a change in strategy from dedicated suppliers that the company has so far depended on. In the next couple of years, around 100 farmers are planned to be drawn into a contract-farming agreement with the company which will buy back 100% of the produce.

The farmers will be trained to cultivate medicinal plants organically and without contamination. The soil has been analysed by the company for its suitability to grow such plants.

The company has plans to grow by 25% next year. It has recently changed its branding and has brought all personal care products under the Himalaya brand.

On the pharmaceuticals side, the company is working on a Hepatitis B drug for which it plans to file a patent in the US. It will be more convenient to transport specially to villages than the currently available vaccine which requires a cold chain, said Mr. Ravi Prasad. "Seven-eight clinical trials are already over for the drug and it should be in the market in a couple of years," he said.