RPG Life Sciences Plans ₹500 Crore Investment for New Acquisition

Mumbai-based RPG Life Sciences is setting its sights on acquiring an additional pharmaceutical asset by allocating nearly ₹500 crore from its committed capital pool. The company has already invested around ₹200 crore from a ₹700-crore fund and intends to find a target within the next 12 months, preferably one with approval from the US Food and Drug Administration (USFDA) or complementary to its current operations.

Managing Director Ashok Nair shared these plans during a virtual meeting with Business Standard, emphasizing the company’s strategy to both expand organically and through acquisitions, especially within its active pharmaceutical ingredients (API) segment. RPG Life Sciences aims to grow this sector by 25 percent annually over the next five years.

Recently, RPG Life Sciences completed acquisitions of Actis Therapeutics and Raghav Lifesciences, with support from private equity firm InvAscent. These purchases are expected to generate revenue starting in the third quarter of fiscal year 2027. According to Nair, these companies should bring in ₹70 to ₹80 crore over the coming six months. The acquisitions have significantly increased RPG’s manufacturing capacity fivefold and doubled its customer base.

In a strategic move, RPG transferred its API business to RPG Active Pharma, a wholly owned subsidiary, to create a more focused API division supported by dedicated capital and specialized management. InvAscent was brought in as a strategic partner to facilitate this focus. This restructuring aims to provide sharper management focus and greater strategic flexibility, while RPG Life Sciences continues to strengthen its formulations division.

Nair indicated that existing manufacturing facilities have the capability to generate about ₹450 crore in revenue without major new investments. Growth is expected to come from better capacity utilization, attracting new clients, and expanding into markets such as Europe and South America. Alongside integrating recent acquisitions, the company will keep looking for additional inorganic growth opportunities.

The company’s recent financial results reflect positive momentum. In the quarter ending September, RPG Life Sciences recorded a 16.5 percent year-on-year revenue increase, reaching ₹211.6 crore and surpassing the ₹200-crore mark for the first time. Adjusted earnings before interest, tax, depreciation, and amortization (Ebitda) rose 15 percent, excluding one-time acquisition costs, while gross margins improved by 260 basis points.

Nair attributed margin growth to an improved product mix, strategic inventory management, and price increases for customers. This progress was achieved despite rising costs for freight, solvents, and packaging related to geopolitical tensions in West Asia. The company did not face any supply shortages during this period.

Looking ahead, RPG Life Sciences plans to maintain its growth trajectory through a combination of domestic formulation sales, further acquisitions, and recovery in international formulations. The company is strengthening its presence in regulated markets such as Europe and Canada while exploring newer regions including Latin America and Africa. Nair noted that RPG has secured tenders in Latin American countries and successfully completed its first contract development and manufacturing organization (CDMO) project on schedule.

Regarding recent government regulations capping trade margins on cancer medicines, Nair stated that RPG Life Sciences does not anticipate a significant effect on sales or profitability. While maximum retail prices must be lowered for oncology drugs like Ivzumab (bevacizumab) and denosumab brands Densurak, Denbri, and Debrumab, the company’s selling prices are expected to remain largely stable.

Nair welcomed the policy change, suggesting that improved affordability could increase patient access to treatment and support volume growth across RPG’s oncology and specialty portfolios. Additionally, the company plans to capitalize on its network of specialist doctors, particularly in nephrology and rheumatology, to promote its recently launched generic semaglutide, a medicine used for diabetes management.

RPG Life Sciences operates as an integrated pharmaceutical company, engaging in the development, manufacturing, and marketing of a wide range of pharmaceutical products. Its focus on active pharmaceutical ingredients and formulations positions it well within the competitive pharmaceutical industry, where mergers and acquisitions are common strategies for growth. The company’s current initiatives reflect a broader trend in the sector towards expanding capabilities, improving supply chains, and entering new international markets to enhance resilience and profitability.