The Cabinet Committee on Economic Affairs, under the leadership of Prime Minister Shri Narendra Modi, has granted its approval for a significant foreign direct investment (FDI) proposal today. The proposal entails foreign investment of up to Rs. 9,589 crore in M/s Suven Pharmaceuticals Limited by M/s Berhyanda Limited, Cyprus.
This FDI approval involves the acquisition of up to 76.1% equity shares of M/s Suven Pharmaceuticals Limited, a prominent Indian pharmaceutical company listed on both the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. M/s Berhyanda Limited, Cyprus, will acquire these shares through a transfer from existing promoter shareholders and public shareholders via a mandatory Open Offer. Notably, the aggregate foreign investment may ultimately increase to 90.1% in M/s Suven Pharmaceuticals Limited.
The proposal underwent a rigorous evaluation by various regulatory bodies, including the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI), and the Competition Commission of India (CCI). The approval has been granted following a thorough examination by relevant departments, RBI, and SEBI, subject to the fulfillment of all applicable rules and regulations.
It’s worth noting that all investments in the foreign investor company, M/s Berhyanda Limited, are held by Advent Funds, which aggregate investments from diverse Limited Partners (LPs). The Advent Funds are managed by Advent International Corporation, an entity incorporated in the USA. Established in 1984, Advent International Corporation has made investments of approximately USD 75 billion in 42 countries. Advent India began investments in India in 2007, with investments totaling around Rs. 34,000 crores across 20 Indian companies in sectors ranging from healthcare, financial services, industrial manufacturing, consumer goods to IT services.
This approved investment is expected to have several positive outcomes, including the creation of new jobs, capacity expansion of the Indian company through investments in plant and equipment, and an enhanced business platform for M/s Suven Pharmaceuticals Limited. The association with the Advent Group is anticipated to drive operational excellence, productivity, and accelerated growth. Moreover, it aims to elevate environmental, health, and safety standards within the Indian company and introduce global best practices in management while offering excellent training opportunities to existing professionals.
The Indian government has established an investor-friendly FDI policy regime for the pharmaceutical sector, emphasizing technology, innovation, and skill development to foster economic growth and development. This policy aims to infuse capital for scaling up domestic productivity, enhancing competitiveness, and generating employment.
Under the current FDI policy, greenfield pharmaceutical projects can receive 100% foreign investment under the automatic route. For brownfield pharmaceutical projects, up to 74% FDI is allowed under the automatic route, with government approval required for investments beyond 74%. Over the last five years (from 2018-19 to 2022-23), the pharmaceutical sector has witnessed total FDI inflows of Rs. 43,713 crore, demonstrating significant growth, with a remarkable 58% increase in FDI during the last financial year.
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