Shares of Suven Pharma surged over 6 percent in early trade on September 14 after the Cabinet Committee on Economic Affairs approved a foreign investment of up to Rs 9,589 crore by Cyprus-based Berhyanda Ltd to acquire up to 76.1 percent stake in the company.
The Cyprus-based entity is controlled by Advent Funds, which are managed by US-based Advent International Corporation.
With this approval, the total foreign investment in Suven could potentially reach 90.1 percent, surpassing the permitted Foreign Direct Investment (FDI) limit of 74 percent in brownfield pharmaceutical projects under the current policy.
An official statement released after the Cabinet Committee on Economic Affairs (CCEA) meeting also mentioned that this approval was granted following a thorough evaluation of the proposal by relevant departments, the Reserve Bank of India (RBI), and the Securities and Exchange Board of India (SEBI).
At 09.21 am, shares of Suven Pharma were trading nearly 4.71 percent higher at Rs 542.75 on the National Stock Exchange.
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The approval from the CCEA came after a span of slightly more than eight months following an agreement between Suven's promoters, the Jasti family, and their associated entities and Advent International. This agreement entailed the sale of the promoters' 50.1 percent stake in the pharmaceutical company to Advent International for Rs 6,300 crore, at a floor price of Rs 495 per share.
As per the pharma company's June shareholding data, the Jasti family held a 60 percent stake in Suven Pharma. In addition to the deal with Advent, which secures a 50.1 percent stake from the promoters, the company is set to acquire an additional 26 percent from public shareholders through an open offer. This move will ultimately increase Advent's total ownership in the Suven to 76.1 percent, with the potential to further increase its stake to 90.1 percent.
Advent had previously announced its intention to explore the merger of its portfolio company, Cohance Lifesciences, with Suven Pharma. This strategic move aligns with their goal of establishing a prominent end-to-end Contract Development and Manufacturing Organization (CDMO) and merchant Active Pharmaceutical Ingredient (API) player, serving both the pharmaceutical and specialty chemical markets.
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