Torrent Pharma gets FIPB nod to raise FII limit to 35%

Gujarat drug firm's investment approval at Rs 3,000 crore

Ahmedabad-based Torrent Pharma has got approval from the government to raise the limit of investment by foreign institutional investors (FII) from 13.09 per cent to 35 per cent.

This would mean a total investment of about Rs 3,000 crore. This is the biggest approval announced on Wednesday by the Foreign Investment Promotion Board (FIPB) in value terms. Pharma and medical device approvals added up to Rs 4,000 crore of foreign investment.

Torrent had recently sealed a deal to acquire a 100 per cent stake in Zyg Pharma, a part of the Mumbai-based Encore Group, for an undisclosed sum. According to reports, the deal is estimated to be valued at Rs 350-400 crore.

In January Torrent had raised Rs 10,000 crore by issuing securities and had said it is open to acquisitions to fuel its growth.

The company had acquired the domestic business of Elder Pharma in December 2013, a deal which gave Torrent access to new therapeutic areas in which it was looking to expand its presence.

 

The second biggest approval by the government was of Syngene International’s proposal to raise the foreign direct investment of Rs 930 crore by raising foreign investment to 44 per cent from the approved percentage of 10 per cent.

Meanwhile, a finance ministry statement said FIPB had rejected the proposal of Strides Arcolab to issue shares to non-resident and resident equity shareholders of Shasun Pharmaceuticals and deferred three proposals from other firms.

The other rejected foreign investment proposals in the pharmaceutical sector included those from Celon Laboratories, Shantha Biotechnics and Sparsha Pharma International.