The decision was taken by CCEA, chaired by Prime Minister Narendra Modi
Foreign investment proposals worth Rs 4,187 crore by pharmaceutical majors Glenmark and Aurobindo were approved by the Government. The decision was taken by the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi.
In February, the Foreign Investment Promotion Board had referred the proposals by the two domestic pharma majors to CCEA for clearance as each of them exceeded its clearance limit of Rs 1,200 crores.
Mumbai-based Glenmark Pharmaceuticals had sought to raise the cap of foreign institutional investor or FII holding to 49 per cent from the current 35.07 per cent. The move would facilitate the drug firm bringing in Rs 2,022 crores of foreign funds into the country.
In Glenmark Pharmaceuticals, an official statement said, “the company has increased the foreign investment limit by FIIs from 35.07 per cent to 49 per cent.” “This will result in an inflow of about Rs 2,022 crores,” it said.
Apart from manufacturing pharma products, the company is engaged in R&D activities. It is a $1-billion Indian pharma company with a global presence that has facilities in India, Europe and South America.
On the other hand, Hyderabad-based Aurobindo Pharma proposed to bring in Rs 2,165 crores worth foreign investments by qualified institutional buyers.
Aurobindo Pharma is engaged in manufacturing generic pharma products, active pharma ingredients and approvals have been given for qualified institutional buyers to infuse fresh equity of “up to seven per cent amounting to about Rs 2,165 crores into the company,” it said.
The existing FII shareholding is 27.32 per cent in the company, it said, adding that “this will enable the company to expand its operations in the areas of anti-infective, cardiovascular and central nervous system related ingredients. Aurobindo Pharma employs more than 9,500 professionals from 26 countries.”
The statement said that both the firms are promoted by Indian entrepreneurs who have developed a global footprint over the years.
They are required to continue to produce medicines under the National List of Essential Medicines (NLEM) at the same levels as they had been doing in the past, it added.
“These companies are also required to maintain R&D expenditure at the maximum levels incurred in the past three years and to provide complete information regarding transfer of technology that has been done,” it said.