Union Cabinet’s Nod For Foreign Investment Of Up To Rs 9589 Crore In Suven Pharma

The union government has approved an FDI proposal for foreign investment in Hyderabad-based Suven Pharma (Suven Pharmaceuticals Limited). The cabinet gave a FDI nod up to Rs.9589 crore by Berhyanda Limited, Cyprus in the company co-founded by former president of Indian Pharmaceutical Association Venkateswarlu Jasti in 1989.

The Competition Commission of India (CCI), in April this year, had approved the acquisition of up to 76.10 percent of the voting share capital of Suven Pharmaceuticals Limited by Berhyanda Limited.

The cabinet committee’s approval is for acquisition of up to 76.1% equity shares of Suven Pharmaceuticals Limited, a public limited Indian pharmaceutical company listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, by Berhyanda Limited, Cyprus, by way of transfer of shares of from existing promoter shareholders and public shareholders through mandatory Open Offer.

The aggregate foreign investment may increase up to 90.1% in Suven Pharmaceuticals Limited, a statement from the government said.

The approval has been given after the proposal has has been evaluated by regulatory agencies like SEBI, RBI, CCI and other relevant agencies.

“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 statement said.

The entire investments in foreign Investor Company, Berhyanda Limited are held by Advent Funds, which pool investments from various Limited Partners (LPs). The Advent Funds are managed by Advent International Corporation, an entity incorporated in USA. Advent International Corporation, set up in 1984 has made investments of about USD 75 billion in 42 countries. Advent India started investments in India since 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 larger platform to Suven Pharmaceuticals Limited by expanding business operations; achieving operational excellence; enhancing productivity and accelerate 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, said the statement.

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