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Time of India
3 days ago
- Business
- Time of India
Avendus, SBI Life pick up over 2.5% secondaries in Aragen for Rs 300 crore
BENGALURU: Avendus Future Leaders Fund (FLF) III, part of the Avendus Group, and SBI Life Insurance have co-led a Rs 300 crore investment in Hyderabad-headquartered contract research, development and manufacturing organisation (CRDMO) Aragen Life Sciences. The fully secondary deal involves the two investors acquiring over 2.5% from the GVK Group's Reddy family's stake in Aragen, Ritesh Chandra, managing partner at Avendus Future Leaders Fund, told TOI. The transaction marks FLF III's second investment after La Renon Healthcare earlier this year. It gives both investors exposure to a sector positioned to benefit from global pharmaceutical companies diversifying R&D and manufacturing away from China, particularly in novel drug development. 'We are very bullish on the CRDMO space given the strong tailwinds as innovator pharma companies increasingly look to India for drug research and discovery,' Chandra told TOI. He added Aragen's scale, client base, and dual capability in small molecules and biologics made it a differentiated bet. 'We don't typically compete for deals, we prefer to work synergistically with the ecosystem and take nimble, minority positions three to four years before a potential liquidity event. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Egypt: Unsold Sofas at Bargain Prices (Prices May Surprise You) Sofas | Search Ads Search Now Undo ' Founded in 2001 Aragen, formerly GVK Biosciences, works exclusively on innovative pharmaceuticals, from early discovery to commercial manufacturing, and does not operate in generics. 'We are one of the few fully integrated players in India that can go from concept to commercial, and among the very few that can do both small molecules and biologics,' Manni Kantipudi, CEO of Aragen Life Sciences, told TOI. The company's new biologics manufacturing facility in Bengaluru, with an initial 2,000-litre single-use bioreactor capacity (expandable to 23,000 litres), began operations this month. A high potent manufacturing unit in Hyderabad, due in October, will enable production of antibody-drug conjugates, mainly for oncology. 'This capability puts us among a select group in India able to make such targeted therapies,' Kantipudi told TOI. About 50% of Aragen's revenue comes from drug discovery research, 20-25% from early development and the rest from manufacturing. The US accounts for 65% of its business, followed by Europe at 25%. 'Of the top 10 selling drugs globally, six are biologics. Small molecules remain a mainstay, but biologics offer higher efficacy, greater barriers to entry, and are a growing share of pharma pipelines,' Kantipudi added. Chandra said FLF III's average hold period is three to three-and-a-half years, with fund life capped at six years. The Aragen deal follows exits such as selling its stake in Juspay to Kedaara Capital and Lenskart to Fidelity. 'Fund sizes and ticket sizes have increased since our first fund in 2019, but the core strategy hasn't changed,' he said. Stay informed with the latest business news, updates on bank holidays , public holidays , current gold rate and silver price .
Mint
3 days ago
- Business
- Mint
Avendus Future Leaders Fund invests ₹300 cr in Aragen Life Sciences with SBI Life
Avendus Group's private equity fund, the Avendus Future Leaders Fund (FLF) has made a ₹300 crore investment for a minority stake in Aragen Life Sciences alongside SBI Life Insurance. Both investors contributed an equal amount, i.e. ₹150 crore each. The investment was made out of FLF III. The stake purchase is a secondary transaction, with both investors buying 'over 2.5%' in Aragen from the Reddy Investment Trust, which is associated with the GVK Group. The Trust diluted its stake in Aragen, which was earlier known as GVK Biosciences, before rebranding it in December 2020 to its current name. 'Healthcare has been a secular theme across funds for a long time. We've now done two deals in the sector," Ritesh Chandra, managing partner of the Avendus Future Leaders Fund, told Mint in an interview. The fund targets late-stage companies across all three of its investment vehicles. Aragen Life Sciences is a contract research, development, and manufacturing organisation (CRDMO) based in Hyderabad. It provides services like drug discovery, development, and manufacturing to other companies in the healthcare and pharmaceutical industry. Avendus FLF III is the latest investor to join Aragen's capitalisation table. Chandra said that the fund's strategy hadn't changed between its three funds. 'We're more of a passive fund that takes stakes in large businesses. We don't compete with private equity. In fact, we work with them in terms of co-opting the ecosystem. So our stakes are typically under 5%," Chandra said. Other investors in Aragen include investment banking giant Goldman Sachs and healthcare-focused private equity firm Quadria Capital, which invested $100 million for a minority stake in the company at an approximate valuation of $1.4 billion. 'With our investment, the valuation is close to the previous round," Chandra said. Avendus Future Leaders Funds' first investment in the healthcare industry was in La Renon Healthcare, made in February. Avendus acquired a minority stake in the company for ₹160 crore. Closing FLF III Avendus operates three Future Leaders Funds. FLF I was ₹350 crore, while FLF II and FLF III are both ₹1,500 crore, the latter has a greenshoe option for another ₹1,500 crore. The fund reached a first close of ₹850 crore in January and is now nearing its ₹1,500 crore target. 'Given inbound interest from our investors, we're likely to exercise the greenshoe option," said Chandra. So far, 21% of FLF III's capital has been deployed, with investments planned over the next two and a half years to reduce exposure to economic cycles. Avendus has a significant market share across the country's technology and startup sectors. In fact, the firm's advisory business has helped many of the country's unicorns through their early and late-stage funding cycles. In 2022, the firm began advisory services for companies planning initial public offerings (IPOs). Exit from Juspay Avendus has partially exited Juspay Technologies, a payments orchestration and solutions provider. The fund first invested in Juspay in 2022 from FLF I and later from FLF II. 'From FLF I, we've returned 1.5X of the capital to our investors. We only sold our position in Juspay from FLF I and continue to retain our position in Juspay from FLF II," said Chandra. Avendus FLF exited its investment in Juspay earlier this year when the company raised a $60 million Series D by selling its stake to Kedaara Capital, which led the investment round.
Time of India
3 days ago
- Business
- Time of India
Avendus Fund, SBI Life lead funding in Aragen
Avendus Future Leaders Fund (FLF), the private strategies fund of the Avendus Group , and SBI Life Insurance invested ₹300 crore in Aragen Life Sciences , India's leading contract research, development, and manufacturing organisation (CRDMO). Both invested ₹150 crore each in Aragen. The transaction, Avendus said, involved acquiring about 2.5% stake in Aragen at a valuation of about ₹12,200 crore ($1.4 billion). In this secondary deal, the promoters -the Reddy family-diluted stake. Finance Value and Valuation Masterclass - Batch 4 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals Batch 2 By Ansh Mehra View Program Finance Value and Valuation Masterclass - Batch 3 By CA Himanshu Jain View Program Artificial Intelligence AI For Business Professionals By Vaibhav Sisinity View Program Finance Value and Valuation Masterclass - Batch 2 By CA Himanshu Jain View Program Finance Value and Valuation Masterclass Batch-1 By CA Himanshu Jain View Program This marks FLF III's second investment, the first in La Renon Healthcare earlier this year. Aragen promoters-Gunupati Aparna Reddy and former Ranbaxy CEO Davinder Singh Brar-held 33.7% stakes each while Goldman Sachs held about 31.3% stake in Aragen. Recently, Quadria Capital acquired a minority stake in Aragen for $100 million. Established in 2001, Aragen offers contract R&D and manufacturing services that span Discovery through Manufacturing (concept to commercialisation) and is focused on novel molecules. Aragen is one of the few companies in India that support small molecules (chemical entities) as well as biologics through the entire value chain, said the statement. "India's pharmaceuticals sector enjoys a distinct advantage with its vast pool of highly skilled technical talent, positioning the country as an attractive global hub for outsourcing both manufacturing and drug-development research ," Ritesh Chandra, managing partner, Avendus Future Leaders, told ET. According to him, geopolitical uncertainties could have some impact on the manufacturing side. "In research and contract services, however, the effect is likely to be limited. The main alternative is China, but many companies are looking to diversify away from it. India's capacity positions us well to capture this opportunity," he noted. Globally, the CRDMO market is valued at around $112 billion. India accounts for $8-9 billion (8-10%) of this, while China holds about 14%.
