The Foreign Investment Promotion Board (FIPB) of the union ministry of finance has approved 37 foreign direct investment (FDI) proposals worth Rs 725 crore in drugs sector last year (2004-05). The major ones, exceeding Rs 100 crore each, were those for Aventis Pharma Ltd. and Jubilant Organosys Ltd. Merck, Nectar and Elder were among the list of companies that went for FDI above Rs 10 crore during the period.

While Aventis received Rs 364.89 crore from its parent company Sanofi-Aventis, to increase the foreign equity in the company from 50.1% to 70.1%, the FDI for Jubilant came from Citicorp International Finance Corporation, USA as share acquisition representing 6.25% of the paid up capital on preferential. The amount involved in this case was Rs 135 crore.

The approval to Merck & Co. Inc to the tune of Rs 66.97 crore was to set up a wholly owned subsidiary for the import, manufacture and sale of pharmaceutical products in the country. The CVC International Investment Management Group has funded Nectar Lifesciences Ltd resulting in the transfer of shares from resident to non- resident and also fresh issue of shares worth Rs 41.88 crore. The company intends to step up manufacturing of antibiotics particularly Cephalosporin range in Punjab.

Meanwhile, the Citicorp International Finance Corporation USA has invested Rs 32.29 crore in Elder Pharmaceuticals Limited thereby increasing its NRI equity from 19.01% to 29.70% to set up manufacturing facilities of pharmaceutical formulations in the dosage forms of tablets, capsules, liquids in the emerging pharma manufacturing hubs of Uttaranchal and Himachal Pradesh.

The FIPB approval also saw transfer / fresh issue of shares worth Rs 26.34 crore from Carl Zeiss Stiftung, Germany to Goa Optolab Private Limited, a company that is into the manufacture of Opthalmic Lenses.

Thailand-based Mount Everest Trading Co. Ltd became a trading partner of Sunsar Impex Pvt. Ltd, Mumbai through the issue of fresh shares worth Rs 11.25 crores during the period. Another major approval in pharma FDI was the decision of US based Invitrogen Corporation to set up a wholly owned subsidiary for carrying out research and development activities in the field of biotechnology, molecular biology, bioinformatics and chemistry. The company had received FIPB approval for investing Rs 9.17 crore for the purpose.

Of the 37 cases, five approvals involved no fresh inflow of funds. Among the companies who received FIPB clearances during the period are Nikken India, Indicus Pharma Private Limited, Axsys Healthtech Ltd, Zenotech Laboratories Pvt. Ltd, Siamed Dental care Pvt Ltd, Aloe Vera of America Inc., Molecular Imaging Associates India Pvt Ltd, Sujok Therapy Centre (India) Private Limited, Genetic Specialties Pvt Ltd, Diamed Scientific Technologies Private Limited, Fresenius Kabi India Pvt. Ltd., MWG Biotech Pvt Ltd, etc.