CCEA nod to over Rs 4,000 cr foreign investment in 2 pharma cos

Aurobindo Pharma and Glenmark Pharmaceutical to utilise the fillip for expansion and research

The Cabinet Committee on Economic Affairs on Tuesday approved two significant foreign investments in the pharmaceutical sector, leading to investment worth Rs 4,187 crore in Aurobindo Pharma and Glenmark Pharmaceuticals.

Aurobindo Pharma, which is engaged in manufacturing generic pharmaceuticals and active pharma ingredients, has been given the nod for qualified institutional buyers to infuse fresh equity of up to seven per cent,s amounting to Rs 2,165 crore into the company, according to a government statement. The existing foreign institutional investment (FII) shareholding in Aurobindo is at 27.32 per cent.

The fresh rise in FII limit will enable the firm to expand its operations in the areas of anti-infective, cardiovascular and central nervous system-related ingredients. Aurobindo Pharma employs about 9,500 professionals from 26 countries.

Glenmark Pharmaceuticals has been given the nod for increasing the foreign investment limit by FIIs from 35.07 per cent to 49 per cent. This will result in an inflow of Rs 2,022 crore. Apart from manufacturing pharmaceuticals, the firm is also engaged in research and development (R&D) activities in drugs. Glenmark Pharmaceuticals is a $1-billion Indian pharmaceutical firm, with a global presence with manufacturing facilities in India, Europe and South America.

Both companies are promoted by Indian entrepreneurs who have developed a global footprint over the years. The companies are required to continue to produce medicines under the National List of Essential Medicines at the same levels as they had been doing in the past. These companies are also required to maintain R&D expenditure at maximum levels incurred in the past three years and provide complete information regarding transfer of technology. This underscores the importance given by the government to strengthen healthcare in the country, by ensuring availability of drugs at reasonable prices.

By investing in R&D, these companies have become players in the global pharmaceutical market and exemplify ‘Make in India’, the government statement added.