RPG Life Sciences carves out API arm; InvAscent to invest up to ₹243 crore

Company scouts for USFDA-approved assets; on track for ₹1,000 crore in revenue by FY28

RPG Life Sciences is carving out its active pharmaceutical ingredient (API) business into a separate subsidiary and bringing in healthcare-focused private equity (PE) investor InvAscent as it seeks to build a larger API platform through acquisitions, capacity expansion, and international growth.

 

The API business will be transferred on a slump-sale basis to RPG Active Pharma, currently a wholly owned subsidiary of RPG Life Sciences. Funds managed by InvAscent will make an initial investment of up to ₹243 crore in the subsidiary.

 

The agreement envisages investments of up to ₹700 crore by RPG Life Sciences and InvAscent in tranches. The capital will be used to strengthen manufacturing infrastructure, expand product portfolio, improve process-development capabilities, and pursue organic and inorganic growth.

   

“Building a meaningful and scalable presence in APIs has been a strategic priority for RPG Life Sciences,” managing director (MD) Ashok Nair said in a statement. “RPG Active Pharma gives us a focused business to pursue this opportunity with greater speed, discipline, and scale,” he added.

 

The company is also doubling down on Mexico and other emerging markets as it seeks to scale up API exports following the restoration of operations at its Navi Mumbai facility, Nair told Business Standard.

 

The API business, which contributed 13.5 per cent to the company’s sales in financial year 2025-26 (FY26), grew 35.6 per cent year-on-year (Y-o-Y) during the first quarter of FY27 (Q1FY27) as the unit returned to operations after being disrupted by a fire last year.

 

Exports account for around 85 per cent of the API business, with domestic sales making up the remainder. The company has a presence in Mexico and Canada but does not currently sell APIs in the US.

 

“We are doubling down on Mexico because of the strong position held by our APIs there. For one of the relevant markets, we control close to 75 per cent,” Nair said.

 

Apart from Mexico and Canada, RPG Life Sciences supplies APIs to Japan, the UK, Vietnam, and the Philippines, and is making inroads into some African markets.

 

The company had been evaluating acquisitions, including US Food and Drug Administration (FDA)-approved assets, predominantly in India, but remained open to opportunities in other countries.

 

“We are closely monitoring the evolving geopolitical situation. In that context, we are open to any asset that can help us move forward strategically,” Nair said.

 

The company expects APIs to grow faster and gain a few percentage points in its overall revenue mix over the next two years. While it does not disclose business-wise margins, Nair said margins across APIs, domestic formulations, and international formulations were in a similar range.

 

RPG Life Sciences aims to develop at least five APIs annually, and has drawn up a three-year product pipeline.

 

Domestic formulations drive revenue target

 

Domestic formulations, which contributed 68.9 per cent to FY26 sales, grew 14.8 per cent in Q1FY27, compared with 11.6 per cent growth in the Indian pharmaceutical market. Naprosyn, one of the company’s key brands, grew 16 per cent during the quarter and is targeted to become a ₹100 crore brand in FY27.

 

RPG Life Sciences recently launched the line extension Naprosyn ES in India, and is preparing to introduce an over-the-counter version of Naprosyn in Canada through Walmart.

 

Its international formulations business has also tied up with a UK-based company to develop three products under a contract development and manufacturing organisation (CDMO) arrangement. Commercialisation is expected to begin within six months.

 

Nair said the company remained confident of reaching ₹1,000 crore in revenue by FY28, supported by domestic formulations, faster API growth, international expansion, new products, and acquisitions.

 

Overall revenue increased 15.8 per cent to ₹195.7 crore in Q1FY27, while earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 17.9 per cent to ₹48 crore. The Ebitda margin expanded 40 basis points to 24.5 per cent.