RPG Life Sciences seeks larger API assets after $215 crore

RPG Life Sciences is searching for larger active pharmaceutical ingredient assets after spending ₹215 crore on two acquisitions within five weeks. Managing Director Ashok Nair told Business Standard the company has over ₹500 crore of capital available for this expansion drive.

The drugmaker is actively evaluating opportunities, focusing on businesses that can add differentiated chemistry, regulatory access, and US Food and Drug Administration-approved capabilities. Nair said the timing of further deals would depend on strategic fit, valuation, and integration readiness rather than a set acquisition count.

Recent acquisitions reshape business

RPG Active Pharma, a wholly-owned subsidiary, recently agreed to acquire the API business of Raghava Life Sciences for up to ₹135 crore. This followed its late July acquisition of Actis Generics for ₹80 crore. The company describes the Raghava deal as part of a "buy-and-build" strategy to create a scaled, integrated API operation.

The two transactions have substantially increased the scale of RPG's API subsidiary. According to Nair, the acquisitions have transformed several key metrics of the business.

Strategy focuses on exports and capability

The expansion aligns with a global trend where drugmakers seek to diversify pharmaceutical supply chains and reduce excessive dependence on China. RPG's strategy goes beyond merely adding manufacturing capacity. The company is targeting acquisitions that bring products, complex chemistry capabilities, customers, and important regulatory approvals to support exports.

The Raghava acquisition adds about 300 KL of installed capacity at a facility near Hyderabad. That plant is approved by the EU and WHO Good Manufacturing Practice standards. The business also holds regulatory credentials including a Certificate of Suitability to the European Pharmacopoeia, EU Written Confirmation, and Korea Drug Master File approvals.

While gaining USFDA-approved manufacturing capability is part of the longer-term strategy, Nair stated the company would not acquire a facility merely for that approval. "The chemistry, product basket, customers, utilisation potential and economics must also be compelling," he said, adding that the export strategy was broader than just the US market.

Scaling up integrated operations

Actis and Raghava together generated approximately ₹70 crore in revenue for the last fiscal year. However, RPG sees significant potential to scale this up as it integrates the businesses and raises capacity utilization. Nair noted that Raghava's 300 KL plant is substantially underutilized. He said the existing infrastructure could support around ₹200 crore of annual revenue at fuller utilization without requiring significant new capital expenditure.

The company plans to achieve this growth through new customers, geographic expansion, and integration with Actis and its existing API operations. RPGAP is being developed primarily as an independent merchant API and advanced-intermediates business, rather than a captive supplier to RPG Life Sciences' formulations division. Nair indicated that third-party customers, exports, and selected contract development and manufacturing opportunities would constitute the larger growth avenue.

The company remains debt-free and plans to deploy its capital towards further acquisitions, manufacturing expansion, product development, and securing more regulatory access.