Mumbai-based Glenmark Pharmaceuticals had sought to raise the cap of foreign institutional investor holding to 49 per cent from present 35.07 percent. The move would facilitate the drug firm's bringing in Rs 2,022 crore of foreign funds into the country.
The decision was taken by the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi. In February, the Foreign Investment Promotion Board had referred the proposals by the two domestic pharma majors to the CCEA for clearance as each of them exceeded its clearance limit of Rs 1,200 crore.
Mumbai-based Glenmark Pharmaceuticals had sought to raise the cap of foreign institutional investor holding to 49 per cent from present 35.07 percent. The move would facilitate the drug firm's bringing in Rs 2,022 crore of foreign funds into the country. In Glenmark Pharmaceutical Ltd, an official statement said, "the company has increased the foreign investment limit by FIIs from 35.07 percent to 49 percent.
This will result in an inflow of about Rs 2,022 crore". Apart from manufacturing pharmaceuticals, the company is engaged in R&D activities. It is a USD 1 billion Indian pharma company with a global presence that has facilities in India, Europe and South America.
On the other hand, Hyderabad-based Aurobindo Pharma proposed to bring in Rs 2,165 crore worth foreign investments by Qualified Institutional Buyers. Aurobindo Pharma is engaged in manufacturing generic pharmaceuticals, active pharma ingredients and approvals have been given for Qualified Institutional Buyers to infuse fresh equity of "up to 7 percent amounting to about Rs 2,165 crore into the company", it said. The existing FII shareholding is 27.32 percent in the company, it said, adding that "this will enable the company to expand its operations in the areas of anti infective, cardiovascular and central nervous system related ingredients.
Aurobindo Pharma employs more than 9,500 professionals from 26 countries". The statement said that both the firms are promoted by Indian entrepreneurs who have developed a global footprint over the years. They are required to continue to produce medicines under the National List of Essential Medicines (NLEM) at the same levels as they had been doing in the past, it added.
"These companies are also required to maintain R&D expenditure at the maximum levels incurred in the past three years and to provide complete information regarding transfer of technology that has been done," it said. This underscores the importance given by the government to strengthening healthcare in the country, by ensuring availability of drugs to the people at reasonable prices. "These investments show the continued confidence of international investors in the domestic Intellectual Property Regime in the pharmaceutical sector," it added.