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Quadria Capital to buy 15% stake in Encube Ethicals valuing firm at $800 million; Multiples PE To Get Exit

The promoters of Encube Ethicals will also sell part stake to raise primary capital. Renuka Ramnath-led Multiples PE picked up a 10 percent stake in the firm in 2016.

June 28, 2021 / 09:57 AM IST
If deal talks fructify, the Quadria Capital stake buy would be the third transaction in the niche & active segment. [Representative image: ShutterStock]

If deal talks fructify, the Quadria Capital stake buy would be the third transaction in the niche & active segment. [Representative image: ShutterStock]

Quadria Capital, which backs Rakesh Jhunjhunwala portfolio firm Concord Biotech and the Asian Institute of Gastroenterology, is close to sealing its second bet in the booming Indian pharma contract research manufacturing segment in the last two years, industry sources with knowledge of the matter told Moneycontrol.

“They are in the final stages of picking up a 15 percent stake in Mumbai based Encube Ethicals for around $120 million (approx. Rs 891 crore), valuing the entire firm at $800 million (approx Rs 5,940 crore),” said one of the individuals cited above.

Encube Ethicals is a contract development and manufacturing organisation dedicated to topical semisolid formulations.

In 2019, Quadria Capital, an Asia focused healthcare private equity firm had invested in Akums Drugs & Pharmaceuticals, India’s single largest pharma contract manufacturing firm, which supplies around 10 percent of all pharmaceutical dosage forms manufactured and sold in India according to its website.

“Existing investor Multiples Alternate Asset Management will get an exit via this proposed transaction. The promoters will also sell part stake to raise primary capital,” a second individual told Moneycontrol.


Renuka Ramnath led Multiples PE invested around $40 million to pick up a 10 percent stake in Encube Ethicals in 2016.

“Kotak Mahindra Capital is the transaction advisor and an official announcement is expected shortly,” said a third individual familiar with the proposed transaction.

All the three individuals above spoke to Moneycontrol on the condition of anonymity.

Multiples Alternate Asset Management declined to comment. Moneycontrol is awaiting an email response from Encube Ethicals, Kotak Mahindra and Quadria Capital and will update this article as soon as it hears from the firms.

Recently , a consortium led by Multiples and consisting of ace investor Rakesh Jhunjhunwala and CPPIB ( Canada Pension Plan Investment Board) acquired the animal health business of Cadila Healthcare for Rs 2,921 crores. On March 8th, 2021, Moneycontrol was the first to report that the Multiples-led consortium had emerged as the frontrunner for the deal.

Quadria Capital also backs diagnostics player Strand Life Sciences, integrated healthcare delivery firm Healthcare At Home India and Kolkata based Medica Super Speciality Hospital. Listed cancer care firm Healthcare Global Enterprises and IPO bound KIMS ( Krishna Institute of Medical Sciences) were also part of Quadria’s portfolio earlier.


Due to a diversified product mix, high-end research services and significant cost benefits, pharma MNCs & global funds are taking an active interest in the fast growing domestic CRAMS/CDMO segment where Indian players have emerged as the preferred partners in drug discovery , development & manufacturing. A contract research organization (CRO) mainly provides drug discovery, preclinical research, clinical trial and other new drug development contract research services for pharmaceutical companies.

If deal talks fructify, the Quadria Capital stake buy would be the third transaction in the niche & active segment.

On March 1, home grown private equity firm True North announced that it had signed definitive documents to acquire a minority stake in Bengaluru-based Anthem Biosciences – an integrated drug discovery, development and manufacturing services provider offering services across multiple platforms, molecule structures, and technologies. Deal valuations and quantum of the stake sold were not disclosed in the official announcement.

On June 30th, 2020, Moneycontrol was the first to report that Anthem Biosciences was looking to dilute 10 percent stake in a fund raising exercise which was aimed at valuing the entire firm at $1 billion.

Prior to the Anthem Biosciences transaction, a $490 million deal was struck between Piramal Enterprises & global private equity giant Carlyle which saw the former sell a 20% stake in its pharma business. The pharma business included a contract development and manufacturing (CDMO) business, a complex hospital generics business selling specialized products across over 100 countries and a consumer healthcare business selling over-the-counter products in India.

Additionally, on February 12, 2020, Moneycontrol reported that Hyderabad-based Suven Life Sciences was exploring a sale of its demerged CRAMS arm, Suven Pharmaceuticals.

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Ashwin Mohan
first published: Jun 28, 2021 09:57 am
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