M&A deals jump in India, lifted by pharma and APIs

India's pharmaceutical sector is seeing a lot of M&A and fund-raising activity.

The healthcare sector saw a lot of traction in India, experiencing growth of 58.4% in terms of value during 2021, recently released data shows. A major push came in from the pharma and Active Pharmaceutical Ingredients (API) sector, with hospitals and the clinics segment coming close behind.

M&A deals in the healthcare sector soared in value to $1.9 billion in the first six months of 2021, as compared to $772 million during the same period of the previous year. Dr Reddy’s Laboratories’ (BSE: 500124) acquisition of Wockhardt’s (BSE: 532300) generic drug business was among a noteworthy deal during the period.

In July, Ind-Swift Laboratories announced it was selling its API business to PI Industries on a slump sale basis, at an enterprise value of $202 million. The API division boasts of a turnover of $113 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of $26 million.

La Renon Healthcare, a pharma company backed by Sequoia Capital and A91 Partners, acquired 51% stake in Enaltec Labs, an API maker. The latter is backed by private equity investor India Life Sciences Fund II. The deal values Enaltec at a post-money valuation of $26 million. The acquisition marks La Renon’s foray into the development, manufacturing and marketing of niche, specialized and complex APIs.

39 transactions valued at a cumulative $3.74 billion

Data from Venture Intelligence, a research agency, showed that last year saw the inking of 72 deals, with 39 transactions valued at a cumulative $3.74 billion. In 2020, there were 51 deals inked, of which 32 deals were valued at $2.36 billion.

The pharmaceutical and API products segment topped with 33 deals in 2021, compared to 24 deals in 2020. While 22 deals had values at $2.14 billion in the segment in 2021, there were 17 deals with values at $1.39 billion in 2020.