Cabinet Approves Rs 9,589 Crore FDI Proposal In Suven Pharmaceuticals From Cyprus-Based Firm

The approval has been granted after examination of the proposal by the departments concerned, RBI and SEBI, and is subject to the fulfillment of all rules and regulations, the Cabinet said.

Union Cabinet meeting chaired by Prime Minister Narendra Modi on Wednesday approved the FDI proposal of up to Rs 9,589 crore in Suven Pharmaceuticals by Cyprus-based Berhyanda Ltd. The government said approved investment aims to generate new jobs, and capacity expansion of the company through investments in plant and equipment.

The proposal has been evaluated by SEBI, RBI, CCI and other relevant agencies, according to 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 the departments concerned, RBI and SEBI, and is subject to the fulfillment 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. Adding that the aggregate foreign investment may increase up to 90.1 per cent. 

Suven Pharm's shares closed at Rs 517.40 apiece on BSE on Wednesday, 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 $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.

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 the last financial year.