Avendus Future Leaders Fund (FLF), a private equity fund managed by the Avendus Group, has led a Rs 300-crore investment in Aragen Life Sciences, a major contract research, development and manufacturing organisation (CRDMO), from its third fund, along with SBI Life Insurance.
Avendus is currently investing out of the third FLF, FLF III. This deal marks FLF III’s second investment, the first being its investment in La Renon Healthcare earlier this year.
Established in 2001, Aragen is focused on innovative pharmaceuticals. Under CEO Manni Kantipudi, the company has carved out a niche in complex technology platforms and has widely adopted digital and AI technologies. The company offers contract R&D and manufacturing services that span discovery through manufacturing (concept to commercialisation) and is focused on novel molecules.
Ritesh Chandra, managing partner, Avendus FLF, said, “Our investment in Aragen reflects our strong conviction in the prospects of the CRDMO market in India and specifically the prospects of the company to capture the tailwinds as global pharmaceutical companies increasingly turn to India for drug research and discovery. Aragen, with its stellar professional leadership team led by Mr Manni Kantipudi, and the backing of a strong board of investors featuring Goldman Sachs and Quadria, is well-positioned to emerge as a leader in the CRDMO segment.”
Chandra added that the CRDMO sector fits well with FLF’s investment philosophy of betting on stable, growing businesses that show consistent performance.
He added that the Indian CRDMO industry is witnessing strong tailwinds due to significant geopolitical shifts underway in contract development and manufacturing.
“Historically concentrated in Europe and China, global pharma companies are increasingly wary of protectionist policies, prompting a diversification of supply chains. India is rapidly scaling up its capacity in both manpower and manufacturing facilities. With abundant talent readily available, we're well-positioned to capitalise on these opportunities,” said Chandra.
Chandra added that the industry is seeing growth rates of 16-17 percent and he expects India to near China’s market share of 14 percent in the next three to four years, from the current share of 8 percent of the global market.
Having made two back-to-back bets in the healthcare sector, Avendus FLF is now eyeing opportunities in the manufacturing space across electronics manufacturing and engineering, Chandra told Moneycontrol.
On consumer sector opportunities, Chandra said that the fund’s macro perspective is cautious on consumer-facing areas.
“There's still some pain ahead in urban consumption, with early signs emerging in financial services. That said, we're open to exploring opportunities in rural consumption, which may hold more resilience,” he said.
Avendus FLF manages consolidated assets under management of over Rs 3,750 crore across its funds and is focused on investing behind late-stage market leaders. Portfolio companies include Lenskart Solutions, La Renon, Sagility, SBI General Insurance, Licious, Juspay, Zeta, Indegene, Veritas Finance, FirstCry and Avanse Financial Services, among others.
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