Fidelity to lead new funding round in Celon Labs

Hyderabad-based Celon Laboratories Ltd, a company engaged in manufacturing and supplying raw materials, formulations and active pharmaceutical ingredients, is raising fresh funding from Fidelity Growth Partners India.

Existing investor Sequoia Capital will also participate in the round.

Both the investors will together invest around Rs 72 crore ($11 million) in Celon Labs, as per an application to Foreign Investment Promotion Board (FIPB). FIPB, the nodal body clearing foreign investment in the country, approved the proposed investment early last month.

The deal involves issue of 100 shares and 71.79 million compulsory convertible preference shares constituting around 28.15 per cent stake. It could not be immediately ascertained if the securities are being issued at a premium or on the face value. If the deal involves a premium to face value, the actual investment would be much higher than Rs 72 crore.

When contacted by VCCircle, Sequoia Capital's spokesperson declined to comment while separate emails sent to the spokesperson of Fidelity and Celon Laboratories, remained unanswered till the time of filing this article.

Back in 2010, Sequoia had invested around Rs 70 crore in the company for 33 per cent stake, valuing it at Rs 210 crore. The PE firm further hiked its stake to 46 per cent by acquiring some shares from existing equity holders in 2012, according to VCCEdge, the data research platform of VCCircle.

Founded in 2007, Celon Laboratories specialises in development and marketing of products which serve niche therapy areas. Its core competency is in oncology and critical care.

The company, which targets the Indian market besides emerging economies at large for branded generics business, has two facilities in Hyderabad.

Fidelity Growth Partners India, which is part of American financial services conglomerate Fidelity, is an active growth stage investor with positions in over two dozen of companies, according to VCCEdge.

This comes as back-to-back deals in the pharma space for Fidelity. In July, Mumbai-based drugmaker Cipla Ltd said it is roping in Fidelity Growth Partners India as an investor in its consumer healthcare business. Fidelity will invest in a proposed firm which would house the consumer healthcare business.

Its other recent investments include A & A Dukaan Financial Services Pvt Ltd, which sells third-party financial services products through the online platform and specialty home healthcare services company Medwell Ventures .

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