Quadria Capital invests $70 million in New Delhi-based Akums Drugs

Quadria Capital, a healthcare-focused private equity firm, has invested $70 million into Akums Drugs & Pharmaceuticals Ltd, a New Delhi-based pharmaceuticals contract research and manufacturing services provider, two people aware of the development said, requesting anonymity.

While the valuation of the New Delhi-based drugmaker could not be independently ascertained, one of the persons cited above said Quadria bought a 10-15% stake in the firm.

Sanjeev Jain, co-founder and director of Akums Drugs confirmed the deal in response to an emailed query from Mint. He said the company plans to use the capital to fund its growth strategy and inorganic opportunities. “We are India’s largest contract manufacturing company. We plan to further strengthen the same and expand internationally,” he said.

Amit Varma, managing partner of Quadria did not respond to text messages and phone calls.

Incorporated in 2004 by brothers Sanjeev and Sandeep Jain, Akums Drugs is one of the largest contract producers catering to domestic and multinational pharmaceutical companies, which together produce about 11-12% of all drugs consumed in India. The company’s clients include pharma companies such as Cipla, Cadila Pharmaceuticals, Glenmark, Novartis and Mylan.

Akums Drugs manufactures tablets, capsules, soft gelatin capsules, syrups, injections, ointments, eye and nasal drops, cosmetics and hormones through its eight manufacturing facilities in Haridwar and one in Guwahati, according to its website.

As of 31 March 2018, its revenue stood at ₹1,552 crore and net profit was ₹90.5 crore, according to a 27 February rating report by ICRA.

In April, Akums Drugs acquired listed bulk drugs manufacturer, Parabolic Drugs Ltd through the Insolvency and Bankruptcy Code process, in a bid to bolster its active pharmaceutical ingredients (API) business.

“Parabolic would be de-listed and merged with Akums Drugs via backward integration,”Jain said, adding the latest fund infusion is the first round of institutional funding into the company.

Founded in 2012, Quadria operates out of its Singapore and New Delhi offices, and has over $1.8 billion assets under management (AUM) with investments in 18 companies across the Asia-Pacific region. The fund is sponsored by Abrar Mir and Amit Varma, who held senior positions in the Religare Group businesses before starting Quadria.

Its portfolio includes companies such as diagnostics chains Strand Lifesciences and Malaysia-based Lablink (M) Sdn Bhd; Singapore’s MWH Holdings Pte. Ltd., a multi-specialty chain of hospitals; home healthcare provider, Healthcare at Home; biopharma firm Concord Biotech, East India-focused Medica Hospitals and Hyderabad-based Krishna Institute of Medical Sciences.

The contract manufacturing pharma space has seen strong interest in the past from private equity funds.

New York-headquartered global growth capital investor General Atlantic in April 2019 took a majority stake in Rubicon Research Pvt. Ltd, a pharmaceutical product development company.

General Atlantic bought the stake from PE firm Everstone and other shareholders.

In 2016, Multiples Alternate Asset Management, a homegrown PE fund, invested around ₹275 crore in Mumbai-based contract development and manufacturing firm Encube Ethicals.

Biocon Ltd’s subsidiary Syngene International Ltd had sold a 10% stake to PE firm True North in 2014, for about ₹ 380 crore.