The proposal by the Hyderabad-based biotech major Shantha Biotechnics Pvt Ltd to infuse an additional Rs.755 crore as foreign direct investment (FDI) has been given green signal by the Government, based on the suggestions by the Foreign Investment Promotion Board (FIPB).
Based on the recommendations by the FIPB which met on September 19, the Government has approved 13 proposals of FDI amounting to Rs.1258.53 crore approximately. Two of the proposals cleared are in the pharmaceutical sector.
“An existing foreign investor in a brownfield pharma company to buy out the shares held by NRIs and Indian residents and to infuse fresh equity investment of Rs.755 crore,” according to the official statement.
The other FDI proposal cleared in the pharma sector was from SD Bio Standard Dignostics Ltd for an infusion of additional Rs.27.5 crore in an existing foreign owned pharma company.
Shantha Biotechnics, credited as the first Indian company to develop, manufacture and market a recombinant human healthcare product in India and regarded as one of the most successful home-grown biotech firms, was bought by French pharma major Sanofi for about Rs.550 million dollar in 2009.
FIBB has also deferred eight proposals including two related to pharma and healthcare industry. The proposals FDI infusion by Kinedex Healthcare Pvt. Ltd., Jaipur and Laurus Labs Pvt. Ltd., Hyderabad were deferred.
Artura Pharmaceuticals Pvt. Ltd., Tamil Nadu, which approached the FIPB for post-facto approval for delay of 6 months and 2 days in receiving part of the consideration for the issue of equity shares in an existing pharma company, was advised that the proposal did not fall within the purview of the agency.
One of the five proposals, over which the decision was kept in abeyance, was also from the pharmaceutical sector. Acebright (India) Pharma Pvt. Ltd., Karnataka, a foreign owned Indian pharma company, had also approached the board to receive additional foreign investment by way of fresh issue and transfer. Post-facto approval is also sought for an earlier transfer.