New Delhi– The Cabinet Committee on Economic Affairs (CCEA) led by Prime Minister Narendra Modi has approved investment (FDI) amounting to approximately Rs 9,589 crore in Suven Pharmaceuticals Ltd, a pharmaceutical company based in Hyderabad. The FDI will be made by Berhyanda Ltd, a Cyprus-based entity controlled by Advent Funds, managed by the US-based private equity firm Advent International Corporation. Berhyanda Ltd is set to acquire a majority stake of 76.1% in Suven Pharmaceuticals.
This proposal underwent an evaluation. Received clearance from various regulatory bodies, including the Securities & Exchange Board of India (SEBI), Reserve Bank of India (RBI) and the Competition Commission of India (CCI). The approval for this FDI is noteworthy because, per the existing policy, brownfield pharma projects can only have up to 74% FDI through the route.
The decision made by CCEA follows an agreement reached over eight months ago when the Jasti family and affiliated entities, who are promoters of Suven Pharma, agreed to sell their 50.1% stake in the contract development and manufacturing organization (CDMO) for Rs 6,300 crore to Advent International. The Jasti family holds a 60% stake in Suven Pharmaceuticals, while the public holds the remaining 40%.
Advent International intends to make an open offer to purchase an additional 26% stake in Suven Pharma from public shareholders, ultimately increasing its holding to 76.1%. There is also the possibility of further increasing its stake to 90.1%. Advent International plans to explore the merger of its portfolio company, Cohance Lifesciences, with Suven as part of its strategy to establish a prominent end-to-end CDMO and merchant API player serving the pharmaceutical and specialty chemical markets.