55 Indian firms to benefit from $2 billion govt PLI-2 scheme

The Indian government’s second Production Linked Incentive (PLI) scheme, with around $2 billion incentives for the pharma sector, is set to benefit 55 qualified pharma companies.

Notable among them in the Group A category are Sun Pharmaceutical (NSE: SUNPHARMA), Aurobindo Pharma (BSE: 524804), Dr Reddy’s Laboratories (BSE: 500124), Lupin (BSE: 500257), Mylan, Cadila Healthcare (BOM: 532321), Cipla Limited (NSE: CIPLA), Intas Pharma and Torrent Pharma (BSE: 500420), among others.

Officials said 278 applications were received by the closing date of August 31, 2021, with the scheme receiving a good response.

The Union cabinet cleared the second PLI scheme in June 2021 for the domestic pharmaceutical sector for financial years 2020-21 to 2028-29. The scheme will provide financial incentives on the incremental sales of pharmaceutical goods and in-vitro diagnostic medical devices to these companies over six years. SIDBI is the project management agency.

The beneficiaries approved for the scheme also include 20 MSMEs (micro, small and medium enterprises), according to the Ministry of Chemicals and Fertilisers.

Companies among Group B include Biocon, MSN Laboratories, Alembic Pharmaceuticals, Wockhardt Limited, Emcure Pharmaceuticals, Macleods Pharmaceuticals, Biological E Limited and Natco Pharma, among others.

A large chunk of the $1.46 billion goes to Group A large 11 companies. Nine large companies under Group B get a total $300 million with each firm getting $33 million. Group C comprising MSME also get $233 million for 35 companies which translates to $6.66 million per firm. Out of these 35 firms, 20 are MSMEs while the rest are smaller firms.

The PLI scheme is based on the strategy of 'Atmanirbhar Bharat' (Independent India), which had been approved by the Cabinet on February 24, 2021. One of the main objectives of the scheme is to create global champions out of India who have the potential to grow in size and scale using cutting edge technology and thereby penetrate global value chains.