The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its approval for a Foreign Direct Investment (FDI) proposal, allowing foreign investment of up to Rs. 9589 crore in M/s Suven Pharmaceuticals Limited by M/s Berhyanda Limited, Cyprus. This involves the acquisition of up to 76.1% equity shares of M/s Suven Pharmaceuticals Limited, an Indian pharmaceutical company listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, by M/s Berhyanda Limited, Cyprus. This acquisition will be carried out through the transfer of shares from existing promoter shareholders and public shareholders via a mandatory Open Offer. The aggregate foreign investment may increase up to 90.1% in M/s Suven Pharmaceuticals Limited.
The proposal has been thoroughly examined by SEBI, RBI, CCI, and other relevant agencies. The approval has been granted after a comprehensive review by the concerned departments, RBI, and SEBI, and is subject to the fulfillment of all applicable rules and regulations.
The entire investments in the foreign investor company, M/s Berhyanda Limited, are held by Advent Funds, which pool investments from various Limited Partners (LPs). Advent Funds are managed by Advent International Corporation, an entity incorporated in the USA. Advent International Corporation, established in 1984, has made investments of about USD 75 billion in 42 countries. Advent India began investments in India in 2007 and has invested approximately Rs. 34,000 crores in 20 Indian companies across various sectors including healthcare, financial services, industrial manufacturing, consumer goods, and IT services.
This approved investment is expected to generate new jobs and facilitate the capacity expansion of the Indian company through investments in plant and equipment. The association with Advent Group is anticipated to provide a larger platform for M/s Suven Pharmaceuticals Limited by expanding business operations, achieving operational excellence, enhancing productivity, and accelerating growth. It will also contribute to improving the environment, health, and safety standards of the Indian Company, and bring in global best practices in management as well as excellent training opportunities to existing professionals.
The Government has established an investor-friendly Foreign Direct Investment (FDI) Policy regime for the pharmaceutical sector to bring in global best practices through technology, innovation, and skilling for accelerated economic growth and development. This policy aims to supplement capital for upscaling domestic productivity, increase competitiveness, and generate employment, among other benefits.
As per the current FDI Policy, 100% foreign investment is allowed under the automatic route in greenfield pharmaceutical projects. In brownfield pharmaceutical projects, FDI up to 74% is allowed under the automatic route, and Government approval is required for investment beyond 74%. The pharmaceutical sector has seen substantial growth in FDI, with a 58% increase in the last financial year. Total FDI inflows in the pharmaceutical sector have amounted to Rs. 43,713 crore during the last five years (from 2018-19 to 2022-23).