Cabinet Approves FDI Of Up To Rs 9,589 Crore In Suven Pharma By Cyprus-Based Berhyanda

The government on Wednesday approved foreign direct investment of up to Rs 9,589 crore in Suven Pharmaceuticals Ltd. by Cyprus-based Berhyanda Ltd.

The approval is for the acquisition of up to 76.1% of the equity shares of Suven Pharma by Berhyanda Ltd., based in Cyprus, according to a release by the Cabinet Committee on Economic Affairs on Wednesday.

This would bring the total foreign investment to 90.1% in Suven Pharma.

This acquisition would be made by way of the transfer of shares from existing promoter shareholders and public shareholders through a mandatory open offer, the release said.

The proposal, as stated in the release, was evaluated by SEBI, RBI, the Competition Commission of India, and other relevant agencies, after which approval was granted subject to the fulfilment of all rules and regulations as applicable.

This transaction is in line with the Foreign Direct Investment Policy regime for the pharmaceutical sector, which allows 100% foreign investment under the automatic route in greenfield pharmaceutical projects and up to 74% in brownfield projects beyond which government approval is required.

Advent Funds, which are under the management of the American company Advent International Corp., hold the entire investment in the foreign investor firm Berhyanda. It has made investments of about $75 billion in 42 countries, while Advent India has invested about Rs 34000 crore in 20 Indian companies across healthcare, financial services, industrial manufacturing, consumer goods, and IT services sectors.

The release stated that the approved investment aims to generate new jobs and expand the capacity of the Indian company through investments in plant and equipment.

"Association with Advent Group is expected to provide a larger platform to Suven Pharmaceuticals Ltd. by expanding business operations, achieving operational excellence, enhancing productivity, accelerating growth, improving the environment, health, and safety standards of the Indian Company, and bringing in global best practices in management as well as excellent training opportunities for existing professionals."

The release highlighted that the total FDI inflows in the pharmaceutical sector have been Rs 43,713 crore during the last five years, that is, from FY19 to FY23. The sector has witnessed significant FDI growth of 58% in the last financial year.

Shares of Suven Pharma closed 0.75% higher at Rs 517.40 apiece, compared to a 0.37% rise in the benchmark BSE Sensex.