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Suven Pharma: Cabinet clears Advent’s acquisition of Suven Pharma for Rs 9,589 crore


The Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi on Wednesday approved the FDI proposal for foreign investment of up to Rs.9589 crore in Suven Pharmaceuticals Limited by private equity firm Advent International through its Cyprus based Berhyanda Ltd.

Advent International has entered into a definitive agreement in December last year to acquire a 50.1% stake in Hyderabad-based Suven Pharmaceuticals, a listed contract research and manufacturing services (CRAMS) firm promoted Venkat Jasti and his family members for Rs 6,313 crore paying ₹495 per share.

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Advent will also launch an open offer for an additional 26% of the company.

The government in a statement said the aggregate foreign investment may increase up to 90.1% in Suven Pharmaceuticals.
The statement added the approval has been granted after examination of the proposal by departments concerned, RBI and SEBI and is subject to the fulfillment of all rules and regulations as applicable in this regard.The entire investments in foreign investor company, Berhyanda are held by Advent Funds, which pool investments from various Limited Partners (LPs). The Advent Funds are managed by US-based Advent International Corporation.Advent International Corporation, set up in 1984 has made investments of about USD 75 billion in 42 countries. Advent India started investments in India in 2007 and so far it has invested about Rs 34000 crores in 20 Indian companies across healthcare, financial services, industrial manufacturing, consumer goods and IT services sectors.The approved investment aims to generate new jobs, capacity expansion of the Indian company through investments in plant and equipment.
Association with Advent Group is expected to provide a larger platform to Suven Pharmaceuticals by expanding business operations; achieving operational excellence; enhancing productivity and accelerating growth; improve the environment, health and safety standards of Indian Company; and bring in global best practices in management as well as excellent training opportunities to existing professionals.

As per the extant FDI Policy, 100% foreign investment is allowed under automatic route in greenfield pharmaceutical projects. In brownfield pharmaceutical projects, FDI upto 74% are allowed under the automatic route and government approval is required for investment beyond 74%.

Total FDI inflows in the pharmaceutical sector has been Rs.43,713 crore during the last five years (from 2018-19 to 2022-23). The sector has witnessed significant growth in FDI of 58% in the last financial year.

Shares of Suven Pharma rose 0.75% to close at Rs 517.40 on BSE on Wednesday, the benchmark Sensex gained 0.37% to end at 67,466.99 points.


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