Motilal Oswal Alternates (MO Alts), the private equity arm of Motilal Oswal Financial Services Ltd, has invested Rs 460 crore to acquire a majority stake in active pharmaceutical ingredient (API) manufacturing firm Megafine Pharma Pvt Ltd, marking the investment firm's first transaction of the year.
Mumbai-based Megafine is an export-focused API company with two US Food and Drug Administration-approved manufacturing facilities in Nashik and Vapi. The company manufactures and sells a diverse range of high-value and low-volume niche APIs for chronic therapies.
"This is our first sole control investment as MO Alts and we would focus on further strengthening R&D and manufacturing capabilities, and creating a platform for further inorganic opportunities," said Rohit Mantri, managing director and co-head of PE at MO Alts.
Established in 1995, Megafine is backward integrated to manufacture its own intermediates. It also offers contract manufacturing services for APIs and intermediates to third-party customers. The firm posted net sales of Rs 322 crore in 2023-24 as against Rs 302 crore a year before. Its net profit stood at Rs 34.9 crore as against Rs 37.8 crore the previous year, as per VCCEdge.
Deloitte was the financial advisor to Megafine and its shareholders on the transaction while JSA and Pioneer were the legal advisors. Alvarez and Marshal was the financial advisor to MO Alts, Quillon Partners was the legal advisor and MP Advisors was the commercial advisor.
MO Alts, which has just hit the road to raise its fifth domestic fund, has backed over 10 companies so far. In 2024, it made two investments. In January last year, it invested Rs 1,328 crore in non-bank lender SK Finance, and in August, it pumped in Rs 330 crore in ethnic snack brand Lal Sweets.
Some other companies that MO Alts has invested in from its fourth fund include health diagnostics service provider Pathkind Labs, tile manufacturer Simpolo Ceramics, footwear brand Asian, gifting platform Join Ventures, digital lending platform Kredit Bee, hygiene products company Pan Health, original design manufacturer of electronics VVDN Technologies, and health insurance company Niva Bupa Health Insurance.
Over the years, the broader pharmaceutical space has witnessed considerable interest from both strategic and institutional investors. For instance, Gujarat-based drugmaker Intas Pharmaceuticals Ltd, which counts PE firm ChrysCapital, Singapore state investment firm Temasek and Abu Dhabi Investment Authority as investors, recently signed a deal to acquire a biologic medication brand from US-based Coherus Biosciences. Earlier this month, ChrysCapital, which is currently deploying its ninth fund with a corpus of $1.4 billion (Rs 12,200 crore), invested Rs 95 crore to buy additional ownership interest in La Renon Healthcare from another existing investor.
Some PE-backed companies have also announced listing plans. Last year, two homegrown healthcare companies, backed by PE firms General Atlantic and TPG, received approval from capital markets regulator Securities and Exchange Board of India to go ahead with their initial public offerings.
