Pharma, health care sectors deliver 5-17 times returns to PE investors

Hong Kong-listed Shanghai Fosun Pharmaceutical controlled by billionaire Guo Guangchang has submitted a non-binding bid to acquire 96 per cent stake in Gland Pharma.

Private equity (PE) major KKR India, which had bought 38 per cent stake for Rs 1,400 crore, could make 2.27 times its invested capital if the deal is valued at $1.25 billion.

A Reuters report on Tuesday said Gland Pharma is valued at $1.5 billion.

CX Partners made 3.52 times returns on its investments in Thyrocare, when the PE firm divested 19 per cent stake in the company in its recent successful initial public offering (IPO). After the IPO,

CX Partners will hold 2.02 per cent in Thyrocare. Norwest Venture, Samara Capital and ICICI Bank did not sell their stake in Thyrocare.

KKR and CX Partners are not alone. PE investors have made five-17 times returns on their investments in healthcare firms and drug makers such as Intas Pharmaceuticals, Mankind Pharma, Paras Pharmaceuticals, Dr Lal PathLabs, Aster DM, Lupin and Indoco Remedies, according to Venture Intelligence.

ChrysCapital has made the best return, of 17 times its investment in Intas Pharmaceuticals and 13 times in Mankind Pharma. Sequoia Capital India has made six times and eight times on its investments in Dr Lal PathLabs and Paras Pharma. Most investors in Aster DM, Lupin, Indoco Remedies, Medreich and Cloud Nine made around five times their investments in these companies.