Govt approves Rs 9,589 crore FDI in Suven Pharmaceuticals from Cyprus-based firm

The government on Wednesday approved an FDI of up to Rs 9,589 crore in Suven Pharmaceuticals by Cyprus-based Berhyanda Ltd to fund capacity expansion of the Indian pharma company and also generate new jobs.

The proposal has been evaluated by SEBI, RBI, CCI and other relevant agencies, said an official release after the meeting of the Cabinet Committee on Economic Affairs (CCEA).

The approval has been granted after examination of the proposal by departments concerned, RBI and SEBI and is subject to the fulfilment of all rules and regulations as applicable in this regard, it added.

''The approval is for acquisition of up to 76.1 per cent equity shares of Suven Pharmaceuticals Limited...by Berhyanda Limited, Cyprus, by way of transfer of shares from existing promoter shareholders and public shareholders through mandatory open offer,'' the release said.

The aggregate foreign investment may increase up to 90.1 per cent in Suven following infusion of the foreign capital.

Suven is listed on BSE and NSE. The company's shares closed at Rs 517.40 apiece on BSE, up 0.75 per cent.

According to the release, entire investments in Berhyanda Ltd 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 US. Advent International Corporation, set up in 1984 has made investments of about USD 75 billion in 42 countries.

Advent India started investments in India in 2007, and so far has invested about Rs 34,000 crore in 20 Indian companies across healthcare, financial services, industrial manufacturing, consumer goods and IT services sectors.

''The approved investment aims to generate new jobs, capacity expansion of the Indian company through investments in plant and equipment,'' the release said.

It further said the association with Advent Group is expected to provide larger platform to Suven by expanding business operations; achieving operational excellence; enhancing productivity and accelerate growth; and improving the environment, health and safety standards of the Indian company.

The association is also expected to bring in global best practices in management as well as excellent training opportunities to existing professionals.

As per the extant foreign direct investment (FDI) policy, 100 per cent overseas investment is allowed under automatic route in greenfield (new) pharmaceutical projects.

In brownfield pharmaceutical projects, FDI up to 74 per cent is allowed under the automatic route and government approval is required for investment beyond 74 per cent.

Total FDI in the pharmaceutical sector was Rs 43,713 crore during last five years (from 2018-19 to 2022-23). The sector witnessed a significant growth of 58 per cent in FDI in last financial year.