Indian pharma companies turn bullish on M&A route – Times of India

MUMBAI: Mergers and acquisitions (M&As) are not new in the recession-proof domestic pharmaceuticals sector. But this year has been unique.
The industry saw 16 deals during 2022 — the largest perhaps in a decade, worth nearly abillion dollars in value. Industry experts estimate the volume could be more. Interestingly, it’s not foreign companies that have backed these acquisitions. It’s the local firms that have become aggressive acquirers, snapping up brands of even MNCs.
Significantly, a majority of the M&A deals in the pharma sector have been backed by private equity (PE) investors.

Among the largest deals are Torrent’s buyout of dermatology firm Curatio Healthcare, and Mankind Pharma’s acquisition of Panacea’s domestic formulation brands (see graphic). Among companies, Mumbai-based JB Pharma announced four deals this year, the highest number in the industry with the latest being the acquisition of Glenmark’s cardiac brand Razel (Rosuvastatin and combinations) in India and Nepal. Ahmedabad-based Torrent Pharma has been aggressive on the deal front too.
“Large Indian players are doubling down on the country as an attractive diversification from a US generics market that’s beaten up. As a consequence, we saw deals where Indian companies snapped up brands from local sellers. Looking to 2023, we see more of same,” said Sujay Shetty, global health industries advisory leader at PwC India.
The Indian pharmaceutical sector is expected to log a growth of 8-10% this fiscal. The Rs 1,91,887-crore organised pharma retail market registered a growth of 6% moving annual total as of November. The market grew 14%in November year-on-year, according to data from market research firm IQVIA.
“Most M&As have been done by Indian strategics. Foreign-branded formulation companies, on the other hand, have been net sellers in the branded generic space. This is an outcome of their global portfolio rationalisation,” noted Sunil Thakur, partner at PE firm Quadria Capital.
Overall, deal activity has been heightened with India Inc becoming aggressive on overseas acquisitions. “The YTD (year-to-date) 2022 deal volumes are on par with YTD 2021. On the other hand, values saw a 47% increase,” an analysis by Grant Thornton Bharat said.