What should one consider closely while planning to start a stem cell bank?
One of the things that is critical in a stem cell banking operation is understanding what segment of banking you want to be in. One goes into the public domain and the other goes into private domain.

Based on what you wish to bank, your infrastructure is linked. So if you wish to bank umbical, there is a particular set of instrumentation etc. There is a difference of instrumentation, difference in technology and infrastructure which come into play for different types of banks.

What are the key challenges one comes across?
Right Awareness: Awareness is the first thing. In the West there are very strong public banks available. So a guy when he requires it, he can rely on this When a part of this company was started, cord blood banking was an expensive proposition. It was considered that only a particular strata of the society can think of this. The reason is that Rs 70,000 is no joke. Our effort was to make it easier for our customers to go in for this banking. So we brought in an EMI scheme, making it cheaper for everyone to avoid it. Every parent should have the right to bank, provided they believe in it. And I don't want them to believe in it without actually having understood the concept. I want it to be a thought through evaluated decision rather than just a spontaneous decision. So our thinking was how can I make it easy. So we brought down this price barrier from Rs 70,000 to Rs 3,400.

Right Set of People: This is a very people-driven business. This is because it is a concept that people need to understand. As humans we like social touch. Actually there is no availability of trained manpower. There is a huge shortage of right kind of people. This is because the industry is very nascent.

Slow Growing Business: This business requires a lot of funds. It has comparatively a longer gestation than most other businesses. Once it reaches a critical mass, it has a snowball effect. But you have to wait. It may take one year or 20 years. This depends on how you strategize, how you market and various other aspects.

How does your EMI scheme works?
I look it from middle class perspective. When a baby is born, the parents have to bear so many expenses. There is meternity costs, socio-religious costs, costs on of medicines etc and then you are talking of cord blood. You have suddenly loaded the person with extra cost. The guy may want to go in for EMI scheme: Rs 3,400 over a period of 25 months. This splits over a period of time. We haven't come across too many defaulters. If there have been any defaulters, it has been because they felt it was not the right decision to take. This scheme is largely driven by us. We are in the process of linking up with some banks. So we believe that it will take things forward.

What is the market size?
India is about 26 million births, and all these are potential customers. Even if 10% go in for this banking, the potential is huge. There is a lot of scope for someone to walk into the business.

How does one start a stem cell banking business?
There is significant capital outlay in terms of setting up a bank but there is even more expense in terms of running the business. My thumb rule understanding is 1:5. There is longer gestation periods, lots of advertising and marketing, awareness driven activities are needed. A lot of awareness can be done by successes coming out of it.

What is the risk in this business?
The biggest threat is that if tomorrow it comes out that the product is not needed. That is the only risk I see. Say tomorrow a research says you don't need to bank your stem cells, we can create enough of them from your hair follicle. Then the industry is going to get affected. Then there are liability issues. We are an insured company. We are the only company in India which is insured in this business. Second is the risk of regulations. Tomorrow, you have mom-and-pop banks coming up in every city. Here we are sitting with a Rs 30-40 crore investment, naturally my costs will be higher. There has to be some standard guidelines, some licensing procedure. As of now there is something but it is not stringent enough. So we get global accreditaions, we work on those models. There are also some ethical and religious issues.

What is the cost of setting up this business?
Most equipments are imported. Rooms have to be fully access controlled, highly secured with all state-of-the-art facility. If you have land or building, the cost would be Rs 20-25 crore. Cost of running, depends on how you run it.

When we entered this market, people were using vials for storage. It was an open storage system. Vials have a problem of contamination. Vials have a problem of contamination. When we came we brought in something known as closed bag system. We can store more than 1.5 lakh cells.

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