Cautious, but optimistic
The life science sector is currently very nascent and companies are still catering to basic needs. Clinical research and drug research are yet to take off. Ms Ruparel is now confident that India will not only see many more healthcare companies sprout here in the next five years, but it will also move up the value chain. Healthcare, generally, is among the top three promising sectors that angel investors consider as an opportunity. The number of start-ups is gradually increasing.

"The medical device companies attract the largest chunk of angel investments, far more than the pharmaceuticals, drugs and biotechnology start-ups. This sector is considered to be high risk and a high return one," explained Ms Ruparel. This space looks promising.

There are a good number of start-ups in drug discovery, platforms and the medical device sectors which are founded by world class entrepreneurs. "Nonetheless, the Indian market is still a few years away from maturity, and therefore what we are likely to see are global plays. The much touted reverse innovation paradigm is therefore constrained by the lack of an easily addressable domestic market. Further, the regulatory environment is nascent. While that may not be a concern in the short-term, it will in the long run hurt companies which are looking to expand globally," added Mr Raguraman.

The venture capital community is extremely jittery about the prevailing drug control regulatory system in the country where companies (involved in drug discovery and clinical research) are facing considerable delays of over several months and in some instances over a year in receiving regulatory approvals.

"These delays have not just been for clinical trials but also for manufacturing licenses. These inordinate delays and lack of funding support are killing innovation and drug discovery business in the country significantly hurting the growth of the biotech sector. The concerned government agencies need to address these issues on a priority basis to bring back the investor confidence," reiterated Mr Nitin Deshmukh, CEO, Kotak Private Equity Group.