Since Malvinder Mohan Singh announced last week that he would sell leading Indian generic drug maker Ranbaxy [Get Quote] to Daiichi Sankyo of Japan, incredulous friends have deluged him with messages.

"They said: 'Have you actually sold your shareholding?' " said Mr Singh, Ranbaxy's chief executive, in an interview at his office on the outskirts of New Delhi.

• Daiichi Sankyo takes control of Ranbaxy
• Ranbaxy to spin off drugs R&D unit

The surprise deal - worth up to $4.6bn - gives Daiichi control of Ranbaxy, which was founded by Mr Singh's grandfather in 1961 and is one of the stars of corporate India.

Under the deal, the Singh family will sell its entire 34.8 per cent stake and Daiichi will seek to buy additional shares to give it the majority of Ranbaxy's voting capital.

The decision to sell was "emotional", Mr Singh said. "But you cannot hold a company from future advancement because your shareholding will come down."

• Shock in India over Ranbaxy sale

Mr Singh, who took the helm at Ranbaxy in 2006 aged 33, said: "If someone else can create more value and do things better, you should be open to exploring those options."

He dismissed rumours that Pfizer [Get Quote] might bid for the 65 per cent non-family owned stake in Ranbaxy as "very speculative" and said he had not been in talks with the world's largest drug maker.

In explaining why he sold his family's crown jewel, Mr Singh was quick to point out the benefits of the deal.

"It takes Ranbaxy to a whole different level," said Mr Singh. "There is huge merit in bringing 'big pharma' and generics together."

• Investing in Indian growth

Joining forces with Daiichi strengthens Ranbaxy's fledgling and expensive efforts to develop original drugs rather than just copying existing ones.

For its part, Daiichi gains expertise in generics, which are still nascent in Japan; low-cost plants in India ; and access to emerging markets.

The deal with Daiichi bolsters Ranbaxy's aspirations to raise annual sales to $5bn by 2012 from $1.6bn in fiscal year 2007 and break into the ranks of the world's top five makers of generic drugs.

"We were well on course to getting there on our own. But I was looking at something far beyond that," explained Mr Singh.

"I was convinced that the business model in the global pharmaceuticals industry was going to change and that there will be a coming together of 'big pharma' and generics. I wanted to make sure I am part of that new paradigm."

Under the deal with Daiichi, Ranbaxy will gain a war chest of nearly $800m to continue an aggressive spree of acquisitions. Japan and developing countries will be target markets, said Mr Singh.

Mr Singh will have no stake in Ranbaxy but will continue as chief executive for his five-year term. "But I'm going to be here far more than that," he said. He made the decision to sell with his brother Shivinder Singh, who sits on Ranbaxy's board and is managing director of Fortis, a private hospital chain.

When asked what his late father Parvinder Singh and grandfather Bhai Mohan Singh would have thought of the deal, Mr Singh replied: "My father would have done the same thing."

After a pause he admitted his grandfather probably would not have made the same decision because of his emphasis on family control.

"My father and I both believe that we put the company first before the family," said Mr Singh. "I've actually learned that from him."