How Arrow GreenTech Ltd. generated Rs.450 Million revenue in 3 years from its IP?

Arrow GreenTech Ltd (formerly known as Arrow Coated Products Ltd.), started in 1992, ensured growth through innovation for a sustainable future through maximum environmental care. They have the expertise in providing solutions, applications and management systems in the health, hygiene, packaging, printing and security industries. It is the only player in India which manufactures cast WSF (water soluble films), a biodegradable material that dissolves in water. Globally the market size for WSF is $262 Mn and is growing at 4-5 per cent per annum.

The company is driven by intellectual properties, develops customized solutions, recommending products that suit the different needs of the customers and bringing meaningful innovations that enhance the quality of life.

Its stock fell to a tenth of its value between 2005 and 2010 after machinery import division shut down. Simultaneously, the water-soluble films business took a long time to pick up. Some investors even wrote off their investments.

Its turnaround has been significant. The shares of the company skyrocketed 3000 per cent in two years from Rs. 15 to Rs. 490 when company started monetizing its patents. The company monetized 3 out 30 patents at that time which will expire after 20 Years.  These three patents generated revenues of Rs. 450 million p.a. over the last three years. Since patent monetization is a very high margin business and earnings herein mainly get converted to cash flow, this has strengthened the company considerably.

Arrow is charting strategies to further monetize at least two patents (from the five targeted) over the next couple of years, which could send its earnings soaring. These five targeted patents are for niche products such as, high security paper, self-destructive security packaging, innovative drug delivery systems, edible WSF, and WSF based adhesives. Each of these products is has multi billion dollar market potential.

The company is now factoring in the returns from its patents and the possibility of more products paying off in future. They have wide range of products e.g. films which go into the making of high security papers used in passports and currency bills. It’s also used in making capsules, tablets and injections. Monetization of three products increased their revenue from Rs. 4 Cr in 2013 to Rs. 50 Cr in 2015.

Currently, the company has 38 patents granted in India in various fields such as health and hygiene, high strength paper, security, packaging, printing, self-adhesives etc. Innovating and patenting them for business continues to be the focus point of the company.

Similarly, for any company, the cost outlays in creating intellectual property and patenting them are long term investments for the future. Therefore, it is relevant to understand that a start-up or a big company can raise funds by monetizing its patents but only after securing their innovation which, otherwise will be subject to theft. An invention can be sold and huge profits can be earned. But patenting is a means of generating revenue for years to come in the long run.


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