“We’re looking at buyouts. These can be companies in the top 30-75 in their category. We will look at the $200 million to $500 million range,” Kshitij Sheth, MD of ChrysCapital told ET in an interview. Sheth said the aim is to grow these companies to “$1.5-$2 billion valuations and take them public eventually. While we could consider a strategic sale, the goal will be to take these platforms public”.
ChrysCapital is focused on deals within top 20 to 50 ranked Indian companies in formulation business. The PE firm has focused on acquiring non-controlling interests in pharma companies. ChrysCapital could partner either another large fund, a strategic or a sovereign fund for bigger acquisitions.
“Any of those three combinations would work for us as a partner. But a partner that can put in as much capital as we can, if not more. Because for us, we focus on industries. We’re industry experts. We understand it inside out. We’ll tell you whom to hire, what strategy to deploy, what acquisitions to target, all of that. Sometimes, we don’t have the ability to write a huge cheque size. That’s when we take in partners that are like-minded and think the same way,” he said.
While local formulation will remain a major focus area, ChrysCapital is open to acquiring export-led companies in niche therapies like gynaecology, ophthalmology, and oncology, along with active pharmaceutical ingredient, contract development and manufacturing organisation, vaccines and injectable companies, Sheth said.The firm recently missed out to KKR in buying Healthium Medtech from Apax Partners. Apax held 99.8% stake in the Healthium. ET reported that the deal was valued at ₹7,000 crore inclusive of debt.ChrysCapital has been one of the major PE investors in Indian pharma with 15 investments worth almost $1 billion over the last 15 years, each with stellar returns. In the past, it had made successful investments in Mankind, Intas, Torrent Pharma and Zydus Cadila. Of the 15, ChrysCapital has exited 10 investments for a cumulative return on invested capital (ROIC) of over 3.6x and 31% internal rate of return (IRR) in US dollar terms. Among pharma companies, ChrysCap is invested in Corona, La Renon, Eris Lifesciences, among others.
At least 2 large pharma assets with potential valuations of close to $2 billion are opening up for sale in the form of KKR’s stake sale in JB Pharma and Advent’s sale of its controlling stake in Bharat Serums & Vaccines.
