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Pharma majors turn to acquisitions as cash stockpile hits ₹49,000 crore
India's largest pharmaceutical companies have built up a record cash reserve of ₹48,913 crore as of March 31, more than double the ₹22,240 crore they held in FY20, according to data analysed by Moneycontrol. The 20 firms that make up the Nifty Pharma Index added over ₹10,200 crore in FY25 alone, signalling a shift in how capital is being allocated.
This stockpile is being used to fund overseas acquisitions, expand into complex therapies and build buffers against trade and regulatory risks, particularly in the US, which accounts for nearly 30 per cent of India's annual pharma exports, valued at around ₹2.5 trillion.
Indian drugmakers focus on mergers and acquisitions
Drugmakers are already using these funds towards significant merger and acquisition activity. Sun Pharmaceutical Industries, India's largest drugmaker, recently acquired US-listed Checkpoint Therapeutics for $355 million (about ₹3,064 crore), expanding its footprint in immuno-oncology and complex therapies. Meanwhile, Mankind Pharma acquired Bharat Serums for ₹13,768 crore in a bid to strengthen its biologics and women's health portfolio.
Strong balance sheets support pharma growth strategy
Analysts cited by the report suggest that most of these companies remain largely debt-free and continue to generate robust operating cash flows, making them well-positioned to sustain margins in the 24-25 per cent range through inorganic growth and product innovation.
Despite the increase in cash, net debt across the Nifty Pharma group rose to ₹11,782 crore from ₹4,014 crore in March 2024, suggesting that companies are borrowing selectively to fund capex and acquisitions while preserving liquidity for longer-term bets.
The shift in financial posture is part of a longer transition from a generics-dominated model to innovation-led growth. Developing complex biologics can cost upwards of $200 million, requiring upfront capital and sustained investment. Sun Pharma is leading this pivot, while others like Zydus Lifesciences, Dr Reddy's, Lupin and Alkem are also investing in consumer health, diagnostics and contract manufacturing.
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