Friday, November 18, 2005
IFC to invest $300 mn in pharma firms
Prabodh Chandrasekhar / Mumbai November 18, 2005
International Finance Corporation (IFC) will invest about $ 300 million in another 3-5 years in pharmaceutical, biotech and healthcare companies in India.
The investments will be in the form of equity participation and loans to companies showing potential R&D and manufacturing capabilities, said senior IFC officials in India. Last year, IFC had invested about $ 30 million in Indian pharmaceutical companies.
"On a combined basis, the agency is expected to invest about $ 400 million over 3 to 5 years in pharmaceutical, biotech, and hospital sectors in India," said Vipul C Prakash, regional manager, South Asia, IFC.
The agency had picked up stakes in Bharat Biotech (24 per cent) and Orchid (12 per cent). IFC had also recently invested about Rs 90 crore in Apollo Hospitals.
Indian pharmaceutical companies have become more dearer to foreign investors post product patent regime in India. More Indian companies are preparing to be invest substantially in basic R&D.
Major MNCs, including GSK, Pfizer, Astra Zeneca, Novartis, and Merck, are increasingly tying up with Indian firms for contract research and manufacturing services.
Indian pharmaceutical sales during the last financial year stood at $4.5 billion, growing at 8 per cent. Indian pharmaceutical export is to the value of $1.8 billion. The current opportunity in the global generics (off-patent drugs) market is of $ 36 billion. The opportunity from custom manufacturing is expected to reach $ 27 billion by 2010.
The healthcare delivery market (hospitals and clinics) in the country touched $ 25 billion in 2005. Of this the private contribution was about 78 per cent. The market is expected to cross $ 87 billion by 2012.
The Washington-based IFC is the largest mutilateral source of loan and equity financing for private sector projects in the developing world.
It promotes sustainable private sector development primarily by financing private sector projects located in the developing world, helping private companies in the developing world mobilise financing in international financial markets and providing advice and technical assistance to businesses and governments.