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The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has granted approval for a Foreign Direct Investment (FDI) proposal of up to Rs. 9589 crore in M/s Suven Pharmaceuticals Limited by M/s Berhyanda Limited, Cyprus. This entails the acquisition of up to 76.1% equity shares of M/s Suven Pharmaceuticals Limited, a publicly listed Indian pharmaceutical company on both the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited, by M/s Berhyanda Limited, Cyprus. This will be done through the transfer of shares from existing promoter shareholders and public shareholders via a mandatory Open Offer. The total foreign investment may potentially reach up to 90.1% in M/s Suven Pharmaceuticals Limited.
The proposal has undergone thorough evaluation by SEBI, RBI, CCI, and other pertinent agencies. The approval has been granted following scrutiny by the relevant departments, RBI, and SEBI, and is contingent on the adherence to all applicable rules and regulations.
All investments in the foreign investor company, M/s Berhyanda Limited, are exclusively held by Advent Funds, which aggregate investments from various Limited Partners (LPs). Advent Funds are overseen by Advent International Corporation, an entity incorporated in the USA. Established in 1984, Advent International Corporation has made investments of approximately USD 75 billion across 42 countries. Advent India commenced investments in India in 2007 and has thus far invested about Rs. 34000 crores in 20 Indian companies spanning healthcare, financial services, industrial manufacturing, consumer goods, and IT services sectors.
The sanctioned investment aims to foster the creation of new jobs, facilitate capacity expansion of the Indian company through investments in plant and equipment. The association with Advent Group is anticipated to offer an extended platform to M/s Suven Pharmaceuticals Limited by broadening business operations, achieving operational excellence, enhancing productivity, and expediting growth. This will also enhance the environment, health, and safety standards of the Indian Company, as well as introduce global best practices in management, along with providing excellent training opportunities for existing professionals.
The Government has established a favorable Foreign Direct Investment (FDI) Policy framework for the pharmaceutical sector to introduce global best practices through technology, innovation, and skilling for accelerated economic growth and development. This includes supplementing capital for scaling up domestic productivity, augmenting competitiveness, and generating employment, among other benefits.
In accordance with the current FDI Policy, greenfield pharmaceutical projects allow 100% foreign investment through the automatic route. For brownfield pharmaceutical projects, up to 74% FDI is permitted under the automatic route, while government approval is required for investments exceeding 74%. Over the past five years (from 2018-19 to 2022-23), the pharmaceutical sector has seen total FDI inflows of Rs. 43,713 crore. The sector experienced notable growth in FDI, witnessing a 58% increase in the last fiscal year.
