Avendus Fund, SBI Life lead funding in Aragen

Avendus Future Leaders Fund (FLF), the private strategies fund of the Avendus Group, and SBI Life Insurance invested ₹300 crore in Aragen Life Sciences, India's leading contract research, development, and manufacturing organisation (CRDMO). Both invested ₹150 crore each in Aragen.

The transaction, Avendus said, involved acquiring about 2.5% stake in Aragen at a valuation of about ₹12,200 crore ($1.4 billion). In this secondary deal, the promoters -the Reddy family-diluted stake.

This marks FLF III's second investment, the first in La Renon Healthcare earlier this year.


Aragen promoters-Gunupati Aparna Reddy and former Ranbaxy CEO Davinder Singh Brar-held 33.7% stakes each while Goldman Sachs held about 31.3% stake in Aragen. Recently, Quadria Capital acquired a minority stake in Aragen for $100 million.

Established in 2001, Aragen offers contract R&D and manufacturing services that span Discovery through Manufacturing (concept to commercialisation) and is focused on novel molecules. Aragen is one of the few companies in India that support small molecules (chemical entities) as well as biologics through the entire value chain, said the statement.

"India's pharmaceuticals sector enjoys a distinct advantage with its vast pool of highly skilled technical talent, positioning the country as an attractive global hub for outsourcing both manufacturing and drug-development research," Ritesh Chandra, managing partner, Avendus Future Leaders, told ET.

According to him, geopolitical uncertainties could have some impact on the manufacturing side. "In research and contract services, however, the effect is likely to be limited. The main alternative is China, but many companies are looking to diversify away from it. India's capacity positions us well to capture this opportunity," he noted.

Globally, the CRDMO market is valued at around $112 billion. India accounts for $8-9 billion (8-10%) of this, while China holds about 14%.