Motilal Oswal PE arm buys majority stake in bulk drugmaker Megafine for Rs 4,600 crore

Motilal Oswal Financial Services Ltd’s alternative investment division has acquired a majority stake in export-centric bulk drugmaker Megafine Pharma Ltd ₹As global companies hope to diversify their supply chains from China, bets of Rs 460 crore.

Mohit anters (MO ALTS) is looking for more inorganic opportunities to develop the platform, and Rohit Mantri is Managing Director and Co-Head of Private Equity at Mo Alts Mint In the interview. “This is our first sole control investment as MO Alts, and we will focus on further strengthening R&D (R&D) and manufacturing capabilities and creating a platform for further inorganic opportunities.”

“We will view the opportunity of inorganic on the platform… to increase other capabilities and increase [more] High-value complex therapeutic areas. “He added that the fund has begun searching for potential partnerships or acquisitions.

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Megafine is a Mumbai-based company manufacturing eco-producing medicines (API), which has been approved by the Federal Drug Administration at two manufacturing facilities at Nashik and VAPI.

The manufacturer’s core therapies include central nervous system and cardiovascular disease. It integrates backwards to make its own intermediates (API raw materials) and provides contract manufacturing services to third-party customers.

Global headwind

According to Bain & Co. The latest report of India’s API export market is expected to grow to US$8-900 million by 2047.

“Double-digit growth at the industry level is very strong… The domestic formula industry has grown at 11-12%, but the API industry is growing faster,” Manterey said. “Whether it is in contract manufacturing or general products On the one hand, people are looking for alternatives outside of China to seek alternatives in the supply chain.”

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Although Megafine is an export-centric company, it is quite diverse in terms of the market. About 35% of its revenue comes from Europe, 35% comes from semi-regulated markets, and the rest comes from large Indian generic drug exporters.

This will help the company given the current uncertainty in India’s largest drug export market, given the current uncertainty in India’s largest drug export market.

“The idea is to have a diverse player [rather] More than just a focused player,” Mantery said.

Niche API Focus

This is not Mo Alts’ first investment in niche APIs. In 2018, it invested in Symbiotec, a leader in steroid and hormone APIs through its third fund. Manterey said the company plans to float its initial public offering (IPO) over the next 18 months.

He added: “Symbiotec has performed very well over the past five years…We continue to scout niche API opportunities with gross margins of over 60%.

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The investment company invested in Dafen through its fourth private equity fund, which ₹Manterey said Rs 45 billion in 2022. Megaffen’s EBITDA margin is 22-25%. EBITDA is income before interest, taxes, depreciation and amortization.