Opportunities in the Indian Pharmaceutical Sector Post COVID-19



The ongoing COVID-19 pandemic has shown the Indian pharmaceutical sector in good light recently, while at the same time, it has significantly exposed the frailties of the sector. Currently, the Indian pharmaceutical sector is in the news for good reasons as it is able to export millions of doses of hydroxychloroquine, an antimalarial which, while not conclusively tested to be able to cure the coronavirus, has had some cases of making patients recover to countries like the United States and Brazil. However, the initial outbreak of the disease in China was a crisis for this very sector, as 70% of the active pharmaceutical ingredient (API) requirement was met by imports from China2 and as supplies for APIs, which is the principal raw material for drug manufacturers stopped, there were worries about how long can the pharmaceutical sector produce at maximum capacity.

Due to this challenge that the sector faced during this crisis, various economic bodies in the country such as the NITI Aayog have mentioned that this needs to be addressed and a new policy must ensure that the manufacturing of APIs and pharmaceutical intermediates within the country should be promoted. The NITI Aayog CEO Amitabh Kant has met representatives of pharmaceutical companies to discuss reducing API dependency on China3, and according to the national president of the Bulk Drug Manufacturers’ Association, the government is looking to build API parks3. While this is an obvious opportunity for pharmaceutical companies to backward integrate and start producing APIs and intermediates, it also provides companies in other sectors such as speciality chemicals to enter this sector. For these players to enter, it would be necessary to know the numerous manufacturing steps that convert a naturally-found product into a tablet.

What is a Drug?

In pharmacological terms, the definition of a drug would be a chemical substance of known composition which evokes a biological effect when administered into a living organism5. In case of a pharmaceutical drug, that biological response would be to treat, cure or prevent a disease or alleviate the symptoms.

The major component of a drug would be the active pharmaceutical ingredient (API). This is the biologically active compound that acts on the body to produce the desired response. In some cases, a drug would have multiple APIs, such as the combination of amoxicillin and potassium clavulanate which forms a more efficient antibiotic than just amoxicillin and is sold under the trade name Augmentin6.

However, the API is not the only component of a drug. A drug also contains various other components called excipients which play other roles. There are various kinds of excipients7. Vehicles, for example, help the active ingredient reach the site of action when it cannot do so for any reason whatsoever. Binders help the different components bind while disintegrants cause the tablet to break apart under specific conditions, such as the extremely acidic conditions in the stomach. Flavours, sweeteners and coatings make the drug more palatable, with the latter causing the added benefit of protection of ingredients from moisture in the air, while colours improve the tablet’s appearance. Enterics control the rate at which the active ingredient is released. Depending on the mode of administration and nature of the disease, some of these excipients are combined with the API to form a dosage.

Drug Production Value Chain

The raw material that starts the value chain would be a compound extracted from a natural source. The earliest drugs as we would know it would often comprise of such compounds. Examples would include penicillin which is produced by moulds of various fungi of the genus Penicillium and quinine which can be extracted from the bark of the cinchona tree. However, today’s APIs are mostly produced by performing further reactions on a naturally-occurring compound to produce a more efficient compound.

The conversion to API from a naturally-occurring compound is a process that make require one or more steps. If it requires more than one step, then the product of every step apart from the final step that becomes the reactant in the following step is called an intermediate. In some cases, an intermediate can be a compound that is already synthesised in industrial quantities for other uses. For example, the anti-inflammatory drug ibuprofen was first synthesised from propionic acid8 which, while available in small quantities from natural sources, was available in large quantities through the reaction with ethylene as it is commonly used as a preservative9. The final step would see the conversion of the final intermediate into the API.

In making the final drug, it has to be ensured that every dosage, such as a tablet, should have the correct composition and the exact amount of the API. In case of tablets, this is done by making a homogenous mix of ingredients through blending and granulation10. The tablet is then made using powder compaction and are subsequently coated with a suitable coating10. In case of capsules, the powder containing the API and other excipients is encapsulated in gelatine or hypromellose11.

The final step of converting the API to form a drug dosage is something Indian pharmaceutical companies are adept in. The problems that arose during the COVID-19 crisis arose from the unavailability of APIs and intermediates. The global API market stood at $182.2 billion in 2019 and is estimated to reach $245.2 billion in 2024 at a CAGR of 6.1%12. As Indian pharma would be hopeful for more APIs and intermediates being made in India, the CAGR of the Indian market would be much higher and massive opportunities lie here for APIs and intermediates to be made in India.

Examples of drug value chains


Hydroxychloroquine is perhaps the most talked about drug in the country at this point of time. The drug that has been tested to work as a treatment for malaria, lupus and rheumatoid arthritis is now believed to be capable of treating COVID-19. As a result of this, the global hydroxychloroquine market is expected to grow at a CAGR of 33.47% from $542.36 million in 2019 to $5415.23 million in 202614. Today, India is the market leader when it comes to manufacture of the hydroxychloroquine drug, amounting to 70% of global production, with major players being Zydus, IPCA and Cipla14. However, China is the leader in the global hydroxychloroquine API production.

There are various patented processes for the synthesis of hydroxychloroquine molecule. In one of the processes, the final intermediate that is reacted to form hydroxychloroquine is 4,7-dichloroquinoline15. 4,7-dichloroquinoline can be produced in four steps from an array of readily available compounds such as benzene and acetic acid16,17,18,19. Therefore, while producing hydroxychloroquine drug is untenable for a new entrant thanks to both strong players in the Indian market and the huge number of regulations in the pharma sector, production of the final hydroxychloroquine compound or any of the intermediates such as 4,7-dichloroquinoline, 3-chloroaniline or diethyl ethoxyethylenemalonate using existing or newly developed pathways is always possible and subject to fewer regulations.


Lopinavir is an antiretroviral that is used in the treatment of HIV/AIDS. It works as a protease inhibitor. It is often used in combination with a low dose of ritonavir, another protease inhibitor and this combination is present in the World Health Organisation’s List of Essential Medicines20. Recently, this combination drug also made the news as Yusuf Khwaja Hamied, the Chairman of Cipla, is repurposing this drug to combat coronavirus21. While there are no available reports with quantitative data on lopinavir’s market size, it is safe to say that the market size will grow at a tremendous rate if it does turn out to be effective against coronavirus.

There are various resources available online which mention how lopinavir is synthesised. One of them mentions how lopinavir was developed in multiple steps using the readily available amino acid L-valine as a starting material22. Production of lopinavir compound or any of the intermediates in the process which is considered the most efficient is extremely valuable as there are plenty of buyers looking to buy it to complete the remaining steps.


Ever since it was approved for medical use in the United States in 1996, atorvastatin has been one of the biggest selling drugs in the world23. One of several statins, it is used to prevent cardiovascular disease and treat dyslipidaemia, or an abnormal amount of lipids in the blood. In 2017, this was the second most prescribed drug in the United States, with the number of prescriptions exceeding 104 million23. Sales of atorvastatin from 1996 to 2012 exceed $125 billion23, making it one of the best-selling drugs of all time. The atorvastatin API market is expected to reach $425 million in 202324. While currently United States is the market leader primarily because it is the country with the maximum demand for atorvastatin, the demand for this drug will increase in other parts of the world including developing countries due to the increased sedentary lifestyle in these places.

There are various routes possible for the synthesis of atorvastatin. One of them, which was mentioned in a research paper, uses readily available 3-fluorobenzaldehyde, isobutyric acid, an amine and an isocyanide as starting materials. The commercial method, as used by Pfizer, uses the Paal-Knorr reaction. Production of the final atorvastatin molecule or the intermediates for any of these routes or any other route which is considered the most efficient is valuable as buyers would look to use this to complete the remaining steps.


Opportunities in the Indian pharmaceutical sector with respect to active pharmaceutical ingredients (APIs) and intermediate compounds were looked at by taking the example of three highly profitable drugs and their value chains. The opportunities are certainly not limited to the examples mentioned above, and this would allow anyone looking to enter this space aspire to make a plethora of APIs and intermediates that can be used to make drugs that perform different actions on the human body.

Many companies in the speciality chemicals sector and other chemicals sectors already have the experience in synthesising large amounts of organic compounds. With a little expansion of their knowledge bank, they can enter this exciting space with assured customers in the form of drug manufacturers. This will not only help pharmaceutical production in India be protected from factors happening in other countries, but also provide many manufacturing jobs to Indian people and bring prosperity to the country.

Many drug manufacturers are also in the API production business, but the amount of API they produce is not enough to match its drug production capacity and therefore, in the current scenario, they are forced to import from countries like China. Backward integrating into the API business and further increasing the capacity of the APIs for the drugs that they are already manufacturing would be a major risk minimising tool for these pharmaceutical companies and help them maintain consistent level of production.

Given this current business environment, it is imperative that the government grabs this opportunity with both hands and helps make India the new global API and intermediates hub. It has been reported that India’s API industry was ahead of China in the 1990s, but thanks to the latter providing various benefits such as free land, cheap utilities such as water and power, and negligible financing costs, China took the lead and soon became the global leader in APIs, thereby making Indian pharmaceutical companies dependent on Chinese API manufacturers for raw material3. In order to make India the new global API hub, the API and intermediate parks will have to be set up where companies get benefits when it comes to utilities and financing. Many companies in the chemical sector are unwilling to enter this space due to the large number of regulations in the pharmaceutical sector and lack of knowledge. The government will have to ease regulations and make it easy for companies to set up an API or intermediate manufacturing plant. To address the latter problem, an economic body like the NITI Aayog can help start conversations between Indian pharmaceutical companies and chemical companies, where chemical companies can identify how their capabilities can help them enter this exciting sector.


For the examples, the processes described were taken from various chemistry websites and research articles that have been referred below. This blog does not definitively mention which process is the most feasible both financially and chemically, or which process is used by industrial players today for the synthesis of intermediates and APIs. This blog does not vouch for the chemical and financial feasibility of the processes explained, and separate research would have to be undertaken to identify what is the most efficient and profitable route to synthesise a given compound.


Authored by: Abheek Dasgupta, Associate

Contact details:


About Intueri: Intueri Consulting is a management consulting firm with nearly 100 man-years of experience in managing organizational challenges, including managing firms and clients through some of history’s biggest crisis periods such as the 1997 Asian Financial Crisis, 9/11 led crisis, 2007-08 global financial crisis. This vast repository of organizational management experience, accrued by senior management, over decades of managing large multinational firms and clients enables Intueri to develop effective, efficient crisis management strategies and provides it with a unique perspective into events and decisions that take into consideration all important aspects of a firm, including assessment of primary, secondary and even tertiary order potential effects on the firm on account of implementation of strategies. Intueri has been helping organisations enter new areas within the chemical sector in order to diversify their product mix with the help of existing players who are looking to buy something they need or to sell something that they make. The firm has consultants with extensive domain knowledge both in the chemical and pharmaceutical sector.

Fundraising action plan for startups amidst the Covid-19 induced uncertainty



Post the 2008 recession, three recently founded startups decided to brave the superlatively bearish sentiment of the economy and developed a blue ocean strategy to enable consumers to try their innovative services. Consumption was remarkably low, translating to restrictive spending and ‘wise’ usage of capital. In such a period, investors and fund houses were difficult to approach for fundraising applications. A significant portion of investors fell short of wealth and even the ones ‘open for business’ were stringent in their due diligence or demanded a higher stake in the ownership. Despite all odds, these three firms stuck to their core value proposition and kept a continuous focus on user satisfaction and strived hard to keep the ‘wow’ factor alive in their product. Post their first funding rounds in late 2008 or early 2009, they have been hunted around by the most glamourous of the fundraising community. At present, quite a few of the mightiest global financial sponsors have parked their funds with them.
Spotify, AirBnB and Uber, thus, acts as pillars of inspiration for businesses to sail through an economic collapse and raise capital during uncertain times.

The above diagram represents the journey of fundraising for an organization from foundation stage to IPO. As depicted, although revenue correlates with the accumulation in funding, the revenue curve gradually flattens with time, till the firm surfaces for an IPO. So, the Early Stage phase (primarily up to Series B phase) behaves as a chief architect of its growth.

Amidst the ongoing crisis, the number of seed deals and early-stage funding deals fell 37% to 228 in the first quarter of the year that ended March 31, as compared to the same quarter the previous year . Several deals under process have been abruptly stopped with the implementation of the “force majeure” clause.

In the first quarter of 2020, the number of Series A deals plunged to 32, the lowest level since the beginning of 2015. This compares with 42 deals struck in the October-December quarter and 60 deals recorded in the same quarter in 2019.

The number of Series B and C deals decreased to 31 in the first three months of the year from 44 in October-December and from 35 in the same period last year.

As quoted to the Economic Times, a Bengaluru based Fintech firm’s founder describes his experience to raise 5 Million USD. He says: “We were in the due diligence stage and most things were done. Suddenly, I received a joint call from both funds to understand my take on the Covid-19 virus outbreak and its impact on our startup”.

COVID-19 spread in India has pushed the banking sector to one of the darkest phases of business lending in its history. Corporate leadership across sectors, irrespective of the size of the organization, has requested an extension of the current 3- month moratorium period. In March 2020, financial sponsors such as major PE/VC firms have collaboratively issued a statement of caution for the registered startup founders in the country. The focus has shifted from growth to cost minimization, and runway extension.

A pessimistic, unfavourable scenario has thus emerged in the fundraising community and this may persist, as far as current expectations, for at least a couple of quarters ahead.

So, here we address the question of how to raise interim capital for startups in the trough cycle.

Inclusion in various schemes of RBI or the Government

The commerce minister Mr. Piyush Goyal met several industry stalwarts and venture capitalists to discuss on a startup relief package to fight the economic downturn caused by the pandemic. Businesses may need to be registered under the Department for Promotion of Industry and Internal Trade (DPIIT) to avail of the much-needed benefits. A significant portion of the Fund of Funds (FoF) corpus of Rs 10,000 crore may be provisioned for disbursement. A petition has also been filed to the government to reimburse 50% of the salaries for a month and to be offered a 20-lakh grant each.

RBI, on the other hand, has received proposals from ministry officials to release a separate bailout package for startups and MSMEs and hopefully, they might be in the rollout planning phase. The decrease in repo rate by 75 basis points shall increase the supply of capital. Although industry believes catering to demand is an arduous task in such extraordinary times.

There might be a silver lining though.

Small Industries Development Bank of India (SIDBI) has launched a Covid-19 Startups Assistance Scheme (CSAS) where government defined startups, based on the below-mentioned eligibility criteria, can receive up to INR 2 crores each for Working Capital Term Loan. Amidst the current crisis, SIDBI has pivoted from equity financing to credit financing.

Startups must scrutinize the various terms and conditions mentioned here before applying for the scheme.

Moreover, the Indian Private Equity and Venture Capital Association (IVCA), the representative body for risk capital in India, has proposed that SIDBI increase the maximum limit of loan amount up to Rs 5 crore, from the currently proposed Rs 2 crore,reduce the interest rate, and ease the criteria that currently allows only unit economics-positivestartups to be eligible to apply for CSAS, along with a longer payback duration.

The loan tenure has been provisioned for up to 36 months with a moratorium period of maximum 12 months. But the new IVCA proposal has requested for a tenure up to 48 months and moratorium period of 18 months.
Businesses may soon avail eased out policy waivers in export expenses, logistics and shipping costs, regulatory compliances and hopefully, tax reductions. These may immensely help business models extend their runway without slashing jobs or salaries.

Venture debt financing

Venture debt firms are specialised institutions catering to debt financing needs for startups. In India, Innoven Capital, Alteria Capital and Trifecta Capital occupy the lion’s share of this market with a collective deployment of 300 Million USD in 2019.

Besides runway extension and a hefty tax shield based on interest paid on debt, founders and leadership team can leverage the freedom of not having to dilute the ownership for a temporary crisis. Moreover, a deferment of EMIs may be granted if the situation worsens to an unprecedented level. Post crisis, the funds raised from equity can be restructured into a preferential arrangement to pay off the debt, easing financial distress between the lender and the lendee.

Venture debt expect a cumulative return of 12-25%, including loan interest and capital returns.

Typical loan terms seen in the industry are as follows:

• Repayment: ranging from 12 months to 48 months. Can be interest-only for a period, followed by interest plus principal, or a balloon payment (with rolled-up interest) at the end of the term.
• Interest rate: Primarily dependent on the yield curve and the MCLR plus the adjusted spread. In India, typically financing may be offered between 14% and 20%.
• Collateral: venture debt providers usually require a lien on assets of the borrower like IP or the company itself, except for equipment loans where the capital assets acquired may be used as collateral.
• Warrant coverage: the lender may request warrants over equity ranging between 5% to 20% of the total loan value. A certain percentage of the loan’s face value can be converted into equity at the per-share price of the last (or concurrent) venture financing round. The warrants are usually exercised during company acquisition or IPO listing in the exchange, yielding an ‘equity kicker’ return to the lender.
• Rights to invest: On occasion, the lender may also seek to obtain some rights to invest in the borrower’s subsequent equity round on the same terms, conditions and pricing offered to its investors in those rounds. It is expected that Convertible Debt market will significantly rise in the future.
• Covenants: borrowers face fewer operational restrictions or covenants with venture debt. Accounts receivable loans will typically include some minimum profitability or cash flow covenants.

Private placements and HNIs

Capital markets, currently, are not an attractive option to park funds for growth. So, investors such as corporate firms present in the incumbent’s value chain, HNI Investors and even Limited Partners (LP) can probably push funds into startupss and MSMEs to diversify their portfolio and leverage strategic advantages to their favour. Larger firms working with the incumbent may propose a board member position as a return value of their funds. Be it upstream or downstream, they may see the incumbent’s business model as a potential target for acquisition and would want to be at the driver seat in managing the startups.

Experienced mentorship and limited dilution are the major positive angles for the startups planning to raise funds from these investors. But the promoters should also stay beware of financial frauds and keep a strong check on legal requirements. As per regulatory compliances, funds raised from less than 200 investors qualify for private placement whereas that from more than 200 investors would push it to a crowdfunding platform and enable a separate set of compliance.


Business models that have either a component of societal welfare attached to its value proposition or solutions to help the society in the crisis are ideal for availing crowdfunding opportunities. Crowdfunding doesn’t involve complicated financial risks as an investment for retail investors generally is significantly small as compared to institutional players. Moreover, the campaign could go viral and thereby, reduce marketing and advertising expenses from the P&L statement. The campaign itself acts as a testimony to the business model.

Moreover, the promoters don’t dilute their share in the firm as the beneficiaries can be rewarded back later with various forms of rewards.

But founders also need to keep in mind the effort and time required to increase the appeal of the model as well as generate sufficient PR content in quick succession. Sensitive assets such as tech algorithms, IP, trade secrets governing the model need to be protected with trademarks, copyrights, and patents. Otherwise, the campaign runs the risk of losing its competitive advantage due to imitation.

As a rule of thumb, the promoters should also consider a 5-8% of funds raised as crowdfunding expenses as both the funding platform and payment gateways shall place their own charges.


Public source of funds over private funds:Government of India may deploy the second round of stimulus package targeted exclusively for the MSME sector and startups. There has been a global wave, across national funds, to aid startups and small businesses thrive in the current situation. In a bearish market, private investors impose extraordinarily conservative or stringent measures to fund startupsand put a strong push to focus on profitability instead of growth. In the Early Stage, even if it sounds attractive, this may be severely detrimental in the long run.

Moreover, raising funds from such schemes imperatively offer benefits beyond monetary terms. Firstly, the access to key policymakers and decision-making units of planning bodies and the cushion to stay ahead of the curve for alignment with governance procedures. Moreover, the funding may achieve a significantly lower cost of capital. It shall help to re-model the capital structure of the business for a healthy financial scorecard.

Venture debt financing over equity financing:Venture debt ensures that founders need not comply with an over-dilution as the pandemic suppresses business valuations. Venture debt can be used as a temporary bridge to maintain or improve growth models and operational scalability until the onset of a bull market. The up-cycle inevitably attracts equity financiers and a healthy business model reaps the maximum benefits then. The Cost of capital is also lower than equity financing and thus, shareholder returns don’t get affected much.

On a cautionary note, venture debt firms will look for the relevant risk as compared to the asset class, so unit economics and asset utilization shall play a critical role in the capital deployment decision.

Authored by: Rajarshi Chowdhury, Associate
Contact details:

About Intueri: Intueri Consulting is a management consulting firm with nearly 100 man-years ofexperience in managing organizational challenges, including managing firms and clients throughsome of history’s biggest crisis periods such as the 1997 Asian Financial Crisis, 9/11 led crisis, 2007-08 global financial crisis. This vast repository of organizational management experience, accrued bysenior management, over decades of managing large multinational firms and clients enables Intuerito develop effective, efficient crisis management strategies and provides it with a unique perspectiveinto events and decisions that take into consideration all important aspects of a firm, includingassessment of primary, secondary and even tertiary order potential effects on the firm on account ofimplementation of strategies.Intueri has been helping organizations of a different scale to raise funds in a hyper-competitive ecosystem and has prepared an end to end value offering for an investor roundtable. The firm has consultants, well balanced with the domain knowledge and cross-sectoral industry analysis approach and possesses a strong network of financial advisors.

Feel free to reach out to us for a detailed discussion.


Navigating the Ongoing Paradigm Shift in the Indian Education Sector

Part 1: The current scenario & responses by offline and ed-tech players

The Indian government announced the nation-wide lockdown on March 24, 2020, bringing thousands of educational institutes’ operations to a halt for at least 21 days, and hence preventing India’s 260 million school and college going population from receiving their education. Several students are in the last stretch of their preparations for national competitive examinations such as JEE and NEET or their board exams, making this an extremely crucial time for both students and their families as well as schools and coaching institutes. Other individuals who were preparing for higher education examinations such as GRE and GMAT have also been thrown for a loop. Further, there is a sudden additional pressure on parents, especially of younger students, to ensure that their child’s studies are not disrupted, while at the same time manage their own work obligations.

There doesn’t seem to be any respite in sight anytime soon. According to the Union HRD Minister Ramesh Pokhriyal, the Indian government will take a decision on reopening of schools and colleges on April 14 after reviewing the Covid-19 situation in the country. With demands to keep the country in lockdown for a few more weeks after April 14, increasing every day, the situation appears bleak and indicates that the duration of these closures is still unknown.

With this uncertain background, both offline and ed-tech players have chalked out different priorities for themselves and have responded in different ways.

Offline players’ response

Offline players, such as pre-schools, primary and secondary schools, colleges and universities, and brick-and mortar coaching institutes, began by shifting their classes online. They bought video conferencing and webinar software such as Zoom and Webex to continue holding classes online. They are using a combination of live classes, recorded videos, online tests and assessment, in conjunction with physical textbooks to impart lessons.

On the other side, to keep the faculty and staff engaged and motivated, schools are using tools such as Microsoft Teams to hold frequent meetings. Some schools have also managed to bring other essential activities such as scheduling, vendor payment, and admission online through the usage of ERP systems. To equip faculty with the right hardware, some schools have purchased laptops and iPads and distributed them amongst teachers. They have also been given an allowance to purchase webcams and upgrade their data plans.

Brick and mortar coaching institutes have also made these changes. Several of these institutes had already begun their migration to online and therefore, had already put in place mobile applications, which students could use to attempt assignments and mock tests. These applications also have a Parent Connect version that parents can use to monitor their children’s progress and performance.

Ed-tech players’ response

Ed-tech players such as BYJU’S, Vedantu and Unacademy, on the other hand, have been on an advertising spree in a bid to acquire as many new customers as possible. To get maximum people to sample their courses, several ed-tech companies such as BYJU’S, Vendantu, Unacademy, Toppr, Testbook, and Upgrad have made their courses free for all. These courses include live classes, recorded videos, doubt resolution, and online assignments and tests. This strategy has allowed ed-tech companies to onboard customers from Tier 2 and 3 towns, where the schools may not have the required IT infrastructure to deliver classes online.

This strategy has also been followed by global players such as Coursera. Coursera has mentioned that it would provide every university in the world, including India, free access to its course catalogue through Coursera for Campus till July 31, 2020.

In addition to making their content library available for free, companies such as Vedantu are also engaging with students over social media. It has launched a #21DayLearningChallenge under which influencers are challenging people to learn something new and then post about their experience on social media.

In order to meet this increased demand, these companies are also hiring more faculty. For example, Lido Learning has decided to hire over 500 online tutors across the country for the month of April to ensure continuous services to their customers.

It is fair to say that the Covid-19 pandemic has accelerated the acceptance rate of ed-tech solutions among the Indian population, and both the offline and online players need to adjust to this new reality.

Part 2: Recommendations for offline players

Due to the speed at which things have changed, offline players have had to adjust almost overnight. We have provided some recommendations that will facilitate these players to provide remote learning.

1. Conduct an audit of your existing capabilities and resources: School, college, and coaching institutions should first take a note of their existing capabilities and resources to go online or provide remote learning. This should include an evaluation of the available technologies and delivery mechanisms. The evaluation should be done in two phases: one, to check the organization’s readiness to respond in the short-term i.e. when the country is in lockdown; second, for when the schools can re-open. To understand about external solutions, organizations should consult with ed-tech start-ups and the Ministry of Electronics and Information Technology representatives. Ensure that the solutions consider the digital savviness of the target audience. For example, if the students are based in a Tier 2 or 3 city, remember to consider that your students may not have access to high-speed internet or sophisticated smart devices.

2. Check which part of your curriculum can be migrated online: During the audit, also check whether the teaching content in your curriculum can be migrated online. Further, plan how you can translate offline content (in the form of physical notes) into online content (for ex, videos and audios). If possible, equip your teaching faculty with the audio-visual tools (such as laptops and smartphones) that they can use to record themselves explaining concepts, which can then be circulated amongst the students. Organizations should also reach out to digital content creators such as BYJU’S and partner with them to provide content to fill in the gaps. There are also several government of India initiatives that can be investigated. For example, India’s National Repository of Open Educational Resources has content curated from CIET and NCERT, India. Schools and colleges can also consider Khan Academy, which offers question banks and videos for learning purposes, covering a gamut of topics including languages, arts, STEM, social studies, and humanities.

3. Organize the order in which the online content should be delivered: It might be the case that the content that has been sourced from external parties, does not fit exactly with your existing curriculum. It is extremely important to decide the order in which this content as well newly developed in-house content be delivered to the students to ensure that the educational objectives are met.

4. Create an online helpdesk for students, parents and faculty: Since this mode of delivery is new for all stakeholders, it is extremely important to set-up an online helpdesk that can answer queries as and when they arrive. This is required to keep all stakeholders engaged during the entire process and to ensure the required results.

5. Provide a onestop-shop for all the content: The organisations should create a central learning system that can provide a consolidated view of all the content and tools available, as well as act as a place where the organization can post general notifications. Schools and colleges that already have learning management systems in place can further integrate them with technologies such as the video conferencing tools such as Zoom and Google Hangouts. For example, Moodle is a free open source platform that is used for blended learning, distance education, flipped classroom and other e-learning projects in schools, university, workplaces and other sectors. Another tool that is available is Google Classroom. This tool, developed by Google, supports online classroom experience for teachers and students. It allows other features as well such as online assessments, administration, scoring and feedback.

6. Ensure that content is mobile-friendly: If possible, the organization should ensure that the content can be viewed on mobile-devices such as smartphones and tabs. This is because a vast majority of people would be having smartphones or tabs rather than laptops or PCs. Ensuring that your content is mobile-friendly would allow it to be viewed by a larger population. Simple tools such as WhatsApp can be used to deliver lessons (in audio or video format), share assignments, and provide real-time doubt solving.

7. Support low-bandwidth / offline solutions: Schools and colleges should focus on creating low bandwidth requiring solutions, for example PDF documents that can be downloaded once and can be viewed offline or test and assignments that can be downloaded and attempted offline and later the attempt can be uploaded online, hence ensuring that the student does need to be online throughout the activity. For example, ePathshala is a portal for ebooks for school education for all subjects. It is available provided by NCERT and is available offline.

 Part 3: Recommendations for ed-tech players

As offline players are scrambling to migrate online, ed-tech players have been using this opportunity to market their products aggressively. Many are wondering whether the Covid-19 pandemic will be for ed-tech companies what demonetization was for digital payment companies. Below we have provided some recommendations on how online players should be approaching the current situation.

1.  Focus on building long-term partnerships along with short-term gains: Online players should use this opportunity to build long-term partnerships and capabilities, instead of just focusing on increasing their top lines. Most of the ed-tech companies have already started investing in increasing their brand awareness and market share through advertising and PR campaigns. One area that companies can focus on is getting an in-depth understanding of the needs and wants of all the stakeholders in the education sector, from schools and colleges to parents to policymakers These companies should be engaging with government ministries, and industry associations to understand how they can upgrade their products to better satisfy the needs of students, parents, and teachers.

2. Invest in educating people about their platforms: Since currently, most of the ed-tech players are competing using similar strategies of aggressive marketing and free access to content, one area that might act as a differentiating factor will be educating people on how to use their platforms. It is fair to assume that in these turbulent times, people will gravitate towards the platform that is easiest to use. Hence, it is essential for companies to put in the effort to familiarise people with how to operate their platforms and apps. This can be done through ads that provide a basic understanding of how to operate a platform or app or through personal discussions with school and college management followed by a virtual webinar with the students. This hand holding in the beginning will go a long way in building trust and familiarity with the company.

3. Onboard teachers and counsellors: As there has been a sudden surge in the number of users on these platforms, companies should invest in onboarding additional teachers and counsellors to ensure comprehensive lectures and content. It may be particularly important to onboard staff who can communicate in vernacular languages since these platforms are witnessing new users from India’s tier 2 and 3 cities.

4. Respond in an agile manner: This recommendation once again comes from the fact that schools and students will continue to engage with companies who respond in a quick and agile manner to their needs and queries. Since it’s highly probable that once finalized, schools will stick to the platforms till the end of the academic year or maybe even the beginning of the new academic year if the lockdown continues for long, ed-tech companies should put in effort to ensure high quality results in the first go.

5. Offer a one-stop-shop solution: A company that offers end-to-end solutions, including delivery course material, assessment, result declaration, and feedback sharing, would be preferable to students, parents, and teachers. This would also increase the probability of the platform being adopted post the Covid19 situation as well.

6. Provide your platform and resources for use by school faculty: Companies can offer their platforms and tools to schools and colleges faculty, who can use them to create their own content and videos. For example, Vedantu has partnered with schools in Bengaluru, Hyderabad, Delhi and parts of Kerala to facilitate teachers to conduct live classes from their homes. The company is allowing schools to create their own content, use their own teachers and conduct end-to-end classes through its platform. Similarly, Unacademy has allowed education institutes to use their platform to conduct classes for free, without any limitations on the hours or number of classes. Unacademy is also providing support to these institutes to set-up their live classes on Unacademy’s platform.

7. Ramp up security infrastructure and processes: With such a surge of new users, both individual and institutional, ed-tech companies need to ensure that their cybersecurity infrastructure and processes are robust. This is especially important keeping in mind that there is a large amount of children’s data involved. Additionally, schools who conduct their classes through third-party platforms would want their curriculum content and delivery videos to remain secure.

Part 4: Impact on the future

It is safe to say that once the Covid-19 pandemic gets over, the education sector as well as people’s learning habits would have been transformed. We believe that the following three areas will be majorly impacted:

1. Change in people’s mindset: This period of lockdown will give people enough time to play around and familiarise themselves with online learning. They will be able to judge for themselves the areas in which online learning was beneficial to In a way, this has and will continue to break down the psychological barrier in people’s minds that online learning is not as good as face-to-face learning. What is most important is that the parents, who are the purchasers of these services, would be able to see the effectiveness and ease of usage of ed-tech platforms as well as the vast range of content that their children can learn from.

2. Digitization of offline players: This lockdown has forced offline players such as schools, colleges and coaching institutes to digitize their entire student journey. Beginning from enrolment to class scheduling to conducting classes to assessments and feedback, all the steps are being conducted in an online set-up. These players are also becoming familiar with the types of tools and contents that are being offered by ed-tech players and in a way awakening them to the competitive threat that these players pose to them. On the other hand, they are also realising how these ed-tech companies can act as allies in some areas and overall enhance their offline offerings.

3. Personalization of ed-tech offerings and marketing: As mentioned above, ed-tech companies are witnessing a surge of new users on their platforms. This brings with it new customer data – data from the type of customers that they hadn’t served before. This customer data can be analysed and mined to reveal new customer segments and patterns. Companies can use this data to identify how students are behaving on their platforms and update their offerings to serve them better. On the other side, the vast amount of contact details that would be collected during this period, can be used to push targeted marketing campaigns that will have a reach across India.

In conclusion, we believe that by the time this pandemic ends, the entire landscape of the India education sector would have transformed and the need of the hour is for all stakeholders to take proactive steps to build their capabilities, so that they are prepared to take on the challenges of this “new normal” scenario.


Authored by: Aranya Kalia, Assistant Consultant

Contact details:


About Intueri: Intueri Consulting is a management consulting firm with nearly 100 man-years of experience in managing organizational challenges, including managing firms and clients through some of history’s biggest crisis periods such as the 1997 Asian Financial Crisis, 9/11 led crisis, 2007-08 global financial crisis. This vast repository of organizational management experience, accrued by senior management, over decades of managing large multinational firms and clients enables Intueri to develop effective, efficient crisis management strategies and provides it with a unique perspective into events and decisions that take into consideration all important aspects of a firm, including assessment of primary, secondary and even tertiary order potential effects on the firm on account of implementation of strategies. This article is consolidation of the experience and knowledge gained by Intueri’s consultants while working with education sector clients and is a demonstration of Intueri’s understanding about the Indian education sector and the paradigm shift it is going through.

Developing an effective workforce restructuring strategy amidst a global crisis


Covid-19 has delivered a severeblow to an already fragile global economy,crippling global supply chains&adversely affecting every firm, sector & nation in its wake. Recovery hopes, at least for the short term appear grim: the economy is expected to go into recession through 2020-21, with the economy expected to contract by as much as 1% of GDP, according to the analysis by the UN Department of Economic and Social Affairs (DESA). This is a sharp downward revision from the previous estimate of 2.5% global growth.As for India, its economic growth is likely to slow down to 4 per cent this fiscal on the back of the current global health emergency according to Asian Development Bank (ADB), with a negative GDP growth for the final quarter of Fy20.

Under these circumstances a number of firms have currently found themselves in a bleak economic landscape, with sharp slowdown in demand, with recovery nowhere in sight and a cost structure that is unsustainable.

For now, the financial markets have taken the brunt of the global risk-off sentiment. However, as time passes, the effect of demand slowdown and drop in consumption will be felt by the majority of the industries and firms, with a number of these firms already precariously placed even before the covid crisis began.

Statistics and figures bear out the difficult predicament of Indian corporates. A survey by FICCI stated that over 50% of Indian companies have experienced negative impact on their operations and nearly 80% have witnessed a decline in cash flows due to the pandemic.

Further, Indian companies are under severe stress to service their debt obligations, according to McKinsey & Company on the indebtedness of Asian corporates.The share of debt with interest coverage ratio of less than 1.5 times of operating profits stood at 43%, even before the covid19 led crisis took hold. The low interest coverage ratio shows that a large part of the earnings is going to service debt and as such decline in operating earnings and operating cashflows could rapidly constitute an existential crisis for the firms in questions

Need for a Workforce restructuring strategy:

Given such a perilous situation and given that recovery appears to be beyond the immediate horizon, a number of Indian corporates are either facing or imminently about to facea series of cascading emergencies requiring urgent interventions, with layoffs and workforce restructuring being one of the many importantdecisions required as firms battle for survival. Under these circumstances, there is often a need for fast decisions, generally translating to rushed, poorly thought out, inefficient, inadequate decisions which then require subsequent corrections, in the process hemorrhaging firm reputation across the workforce community and decimating workforce morale across surviving members.

Consider NerdWallet. It started 2017 as a San Francisco Business Times Best Place to Work. Then it administered three rounds of layoffs. It ended 2017 with a tarnished employment brand and a Glassdoor profile filled with comments about how having three rounds of layoffs in one year “has crashed the company morale.”

Additionally, executives tend to delegate such unpleasant, often thankless decisions to individual business units/verticals and lower level managers instead of developing a comprehensive, coordinated approach across the company and group companies. As a result, it is not uncommon to find a firm laying off an employee and then hiring for the same skill set in another part of the organization, in the process wasting additional time, money and resources for no net gain.

Nearly all of this can be avoided through the development and implementation of a cogent, structured workforce restructuring strategy that is in alignment with the firm’s immediate and medium-term goals. It can mean the difference between survival and collapse. It can also mean the difference between disgruntled employees, emotionally scarred workforce and a dignified separation. This article looks at the key factors to consider when developing a workforce restructuring strategy.

Key factors to consider

Develop a comprehensive strategy for the crisis period and beyond:

There is a strong temptation to think of workforce restructuring in isolation. Typically, firms turn to episodic restructuring based on short sighted strategy, or even on hope, prayers and wishful thinking as the basis of workforce restructuring.This is especially true in periods of crisis, when executives are firefighting a series of emergencies, which has the effect of narrowing the field of vision away from the big picture and strategy towards the individual decisions and the tactical.

Consider the case of Nokia. At the beginning of 2008 senior managers at the Finnish telecom firm were celebrating a one-year 67% increase in profits. Yet price-based competition from low-cost Asian competitors, and increase in labor costs by 20%convinced management to layoff the German plant’s 2,300 employees, angering employees over perceived injustice, ultimately costing Nokia €200 million—more than €80,000 per laid-off employee—not including the ripple effects of the boycott and bad press. The firm’s market share in Germany plunged; company managers estimate that from 2008 to 2010 Nokia lost €700 million in sales and €100 million in profits there.

There was no real long term or well thought out strategy as the bedrock for this corporate decision. Workforce restructuring became the end in itself, as opposed to being the means to an end. It is entirely possible that a well-developed, well thought out corporate strategy might have led to the same conclusion regarding workforce restructuring strategy. However, odds are such a broad level strategy would have recognized the dangers and risks of the plan, and managed the situation better, mitigating the needless fallout.

It is the view of Intueri that any workforce restructuring decision must further the firm’s broader strategic goals and objectives, and that workforce restructuring strategy is the means to an end.  This requires that the restructuring strategy be in alignment with firm strategy, which in turn requires a cogent, comprehensive strategy for the firm, both for the crisis period and beyond.

An effective, well thought out broad level strategy will enable decision makers to develop restructuring strategies that best meet the objectives and goals of the strategy and thus by extension, have the best possible impact on a firm’s battle for survival.

Centrally assess resource requirements and develop restructuring strategy at a central level

Construction GMBH (name changed) is an Indian EPC firm. A few years ago, one Business Unit of the firm conducted a major workforce revision, resulting in the layoff of several thousand employees, mostly for reasons of redundancy. Roughly at the same time, other verticals of the firm were conducting large scale hiring. There was no coordination between the different vertices of the firm on the question of employee management. Consequently, roles that could have been filled up with internal transfers had to be hired externally. Competent employees with years of organizational knowledge, core expertise and on whom the firm had spent several hundred thousand rupees were lost to the firm. This also caused resentment among the employees, and poor optics for the firm.

This could have been avoided by conducting a workforce requirements audit at the central/firm level before moving ahead with the layoff. Intueri understands that a detailed audit of the workforce may not be possible or feasible in the current crisis. However, a quick and dirty assessment, carried out by mid-level line managers and below, when aggregated and utilized to guide workforce decisions could be substantially effective in optimizing workforce internally, saving the firm time, money and resources that would have otherwise been spent on external hires. It would also keep individuals with firm specific skills, thus avoiding the cost of training up the new hires.

Consider Alternatives to layoffs

Workforce restructuring is not without its own risks. There is no guarantee that the objectives the executives set out to meet through layoffs will be met, or that the firm will benefit from layoffs. Often, the end results are entirely in opposition to expectations.

In a 2012 review of 20 studies of companies that had gone through layoffs, Deepak Datta of Arlington University, Texas discovered that after layoffs a majority of companies suffered declines in profitability, and a related study showed that the drop in profits persisted for three years. (HBS)

Additionally, companies that shed workers lose the time invested in training them as well as their networks of relationships and knowledge about how to get work done. Valuable time is lost as surviving employees reorient themselves and reestablish these networks. This can have real consequences in a crisis scenario, where time is at a premium. Further, while short-term productivity may rise because fewer workers have to cover the same amount of work, that increase comes with costs in terms of quality and safety, as also the heightened danger of risk creep in operations as fewer people manage much more resources andresponsibilities. The increased workload and low morale following a layoff has been known to cause increase in workforce attrition and turnover amongst survivors. There’s also the question of the effect on a company’s reputation: E. Geoffrey Love and Matthew S. Kraatz of University of Illinois at Urbana–Champaign found that companies that did layoffs saw a decline in their ranking on Fortune’s list of most admired companies. (HBS)

On the other hand, innovative, long term vision-based workforce restructuring can provide real gains. ConsiderAmazon: it will invest US$700 million to retrain 100,000 employees—a third of its U.S. workforce—in new technologies.  This way, the company protects the knowledge and the internal networks the employees have developed while bringing the workforce up to speed. AT&T is another example. It retrained over 100,000 employees who were stuck in jobs in danger of becoming redundant. The results seem very positive: 18 months after the program’s inception, the company had decreased its product development cycle time by 40% and accelerated its time to revenue by 32%. Since 2013, its revenue has increased by 27%, and in 2017 AT&T even made Fortune’s 100 Best Companies to Work For list for the first time.

Intueri believes that firms should, unless absolutely necessary, avoid the temptation of layoffs and focus on alternative workforce restructuring strategies. In the long run, the benefits could substantially outrun the incremental costs.

Ensure dignity to workforce

Layoffs are difficult, unpleasant, unpopular, thankless,even highly risky decisions to communicateto the workforce and as such most managers tend to take a hands-off approach, with as little emotion as possible, completely avoiding the often devastating psychological impact on the workforce, both on the ones being let go as well as the survivors. Often managers are so fearful of erring on the wrong side, they will read out a prepared corporate speech, or even send an impersonal mail, dispassionate in tone and dehumanizing in approach, making employees feel like they were just anotherstatistic. This dehumanization at times is compounded by other humiliating experiences, such as having guards escort employees off the campus, denying employees their basic dignity.

Even the employees who survive the restructuring do not escape unscathed, with a large number demoralized by the loss of friends and colleagues due to the restructuring, and worried abouttheir ownjob security in the days to come. This is particularly true in case of a poorly executed, rough restructuring exercise where employees feel their dignity was denied. Consequently, according to Harvard, survivors on average experienced a 41% decline in job satisfaction, a 36% decline in organizational commitment, and a 20% decline in job performance.University of South Carolina found that downsizing a workforce by 1% leads to a 31% increase in voluntary turn over the next year.


Studies have shown that when firms take their employees into confidence, and when firms take measures, that show they care, they reduce the anger, the hostility and negative emotions and even soften the extent of the psychological blow associated with the layoff. Taking a more human-like approach not only minimizes survivor guilt, but it helps with morale, productivity and makes those let go feel like they were truly cared for (HBS)

1.Take the workforce into confidence: it is astonishing as to how many firms are loath to take their own employees into confidence. There is almost a juvenile tendency to keep information away from employees, leading to nervousness and restlessness amongst the employees, the ideal breeding ground for rumors and conspiracy theories which only serve to enrage and bring down the morale of the workforce.

Taking employees into confidence, from an early stage, would ensure that employees have sufficient information on the situation. When workers understand the why behind a company’s decision it increases their trust in the company and doesn’t take a toll on their self-confidence.

2. Communicate effectively & decisively: it is crucial that the entire management team is on the same page and has developed and implemented a comprehensive communication strategy. It is important that the firm be honest,transparent, open and timely in their communication, and avoid impersonal communication methods like email. In fact, according to a number of experts, the worst thing a company can do is blindside their workers and conduct layoffs through an email.

3. Help Employees move on in their careers: Firms should consider assisting employees beyond the legal mandate: a severance package or other benefits. Managers should offer to write letters of recommendation for their reports. Firms could and should offer to assist the employees being let go in finding their next jobs. These gestures help show to the employees that the firm cares.

4. Show Empathy: The process of layoffs, designed to protect the firm, can feel very mechanical and impersonal, at a point in time when employees are going through a stressful, emotionally vulnerablephase.

Empathy costs the firm nothing but can reap rich dividends if done right. Employees talk amongst their colleagues and friends across firms. if they feel they are treated in an undignified manner, word will travel across their networks and through online reviews about the company and their experience. Empathy can make the difference between a tarnished reputation and a trustworthy reputation in the recruitment market.

5. Securesurviving workforce morale: Layoffs, even when executed in the best possible manner, can cause employees to feel they’ve lost control: The fate of their peers sends a message that hard work and good performance do not guarantee their jobs.This could have the impact of reducing long-term productivity, causing a deterioration in Quality,safety and supervision standards and increase of employee burnout and turnover rates. It is essential that firms do all they can to ensure morale of the survivors remains high. The very survival of the firm depends on these chosen employees. Practices such as having counsellors to help employees deal with the fallout, guilt of restructuring , having an open organizational culture where information is freely shared, and taking the employees into confidence regarding the firm’s condition are among the vast set of measures that management should consider to secure workforce morale.

Be Aware of the Danger of risk creep: Risk creep is a term that describes the insidious and unrecognized increase in risk that occurs despite every effort to mitigate risk or avoid it. Risk creep is one of the most difficult aspects of the risk management process to truly understand and manage. It is also rarely considered when planning workforce restructuring despite the potential for catastrophic losses from an inadequate management of risk creep.

Consider Boeing: Dennis Meulenberg demanded price concessions from suppliers, heaped more cost demands on engineers, and cut the workforce about 7 percent while making many more planes during his tenure as CEO.

Employment in the flight crew operations team, the team that  managed how pilots interacted with the plane’s software and controls—the very issue suspected of flummoxing crews in the Lion Air and Ethiopian Airlines tragedies,  had been cut in half, from 30 to 15 over 5 years.  Employees testified to intense low morale because of all the layoffs—constant, grinding layoffs, year after year, forcing them to watch their step and be careful about what they said. Similar cuts were carried out at key engineering teams, all under the implied assumption that the reduced team would lead to increased efficiency while risks remained manageable. Unfortunately, the reduced workforce, combined with increased responsibilities and targets meant that corners had to be cut by the teams. Each step of cost cutting, and workforce restructuring caused an incremental rise in operational risk to the firm and its products, i.e. risk creep, which went unnoticed by the workers and management until the final catastrophic failure. It does not mean that risk creep was solely responsible for the events that led up to the twin Boeing 737-Max crash. But risk creep did play a major role in it.

FAA (Federal Aviation Agency) is itself another example of a firm inflicted with risk creep brought about by continuous workforce restructuring and cost cutting. The workforce was reduced to the extent that it became impossible for FAA to conduct necessary checks on its own, and they began to rely on Boeing for assessments that should have clearly been conducted internally. This in large part contributed to the lack of effective oversight that could and should have prevented the twin crashes.

History is full of company examples where this philosophy of operating risk creep follows through, often silently, to the point of putting the company at legal, reputational and financial risk beyond the likelihood of recovery. The biggest challenge with managing and mitigating risk creep is that it can be almost impossible to measure incremental risk of individual decisions, and thus be undetected until failure. As such, it must be considered integral to decision making such as workforce restructuring.


The Global and Indian corporates are in a difficult predicament; supply chains have been disrupted; economic activity battered. The world economy has ground to a halt and slipped into recession. The end of the COVID-19 crisis appears nowhere in sight and even thoughts of recovery stretch well beyond the immediate horizon. In these circumstances, a number of firms find themselves in an existential crisis. For a number of these firms, some form of workforce restructuring, even the dreaded layoffs, will be inevitable. For others, layoffs will be a strong temptation as cash inflows slow and costs begin to bite. Intueri advises that workforce restructuring be part of a larger corporate strategy, aimed at managing the firm through these difficult times and through the early recovery period. It is the belief of Intueri that workforce restructuring is the means to an end and must not be considered an end in itself. Intueri further advises that firms avoid workforce layoffs unless absolutely necessary given their pernicious effect on the firm and its employees. If layoffs are inevitable, Intueri asserts that such a decision and strategy be devised at a centralized level, taking into account the requirements of the entire firm/group company. When layoffs must be carried out, Intueri strongly advocates that the firms must treat their workforce with the dignity and empathy they deserve. Finally, Intueri warns of the dangers of risk creep arising as a consequence of workforce layoffs.


Authored by: Bikash Sarkar, Associate Consultant

Contact details:


About Intueri: Intueri Consulting is a management consulting firm with nearly 100 man-years of experience in managing organizational challenges, including managing firms and clients through some of history’s biggest crisis periods such as the 1997 Asian Financial Crisis, 9/11 led crisis, 2007-08 global financial crisis. This vast repository of organizational management experience, accrued by senior management, over decades of managing large multinational firms and clients enables Intueri to develop effective, efficient crisis management strategies and provides it with a unique perspective into events and decisions that take into consideration all important aspects of a firm, including assessment of primary, secondary and even tertiary order potential effects on the firm on account of implementation of strategies. Intueri has been helping organisations enter new areas within the chemical sector in order to diversify their product mix with the help of existing players who are looking to buy something they need or to sell something that they make. The firm has consultants with extensive domain knowledge both in the chemical and pharmaceutical sector.