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IFC to make $47.5 mn debt investment in Granules India

20 February, 2017

International Finance Corporation, the private-sector arm of the World Bank, is planning to provide $47.5 million (Rs 318 crore) in debt funding to drugmaker Granules India Ltd.

The corporate loan will help the company execute its expansion programme, IFC said in a disclosure note.

IFC said the company is setting up a bulk-drugs manufacturing facility in Vishakhapatnam, expanding existing capacities and investing in R&D to improve its product mix in favour of higher value-added products. This programme is estimated to cost about $84 million, IFC said.

Granules India plans to finance the programme with debt of $68.5 million, including IFC’s contribution, and the remaining through equity and internal accruals.

Granules has factories near Hyderabad and Vishakhapatnam, along with an R&D and manufacturing facility in Virginia, US. The company, through its joint ventures, also has one plant in China and another plant in Vishakhapatnam.

The company makes bulk drugs, formulation intermediates and finished dosages of a variety of drugs. It sells its products mainly in the US, Europe, Latin America and India. Granules began operations in 1991, near Hyderabad.

IFC had, in 2007, made an equity investment of Rs 24.3 crore in Granules, according to VCCEdge, the data research arm of VCCircle. It sold the shares in stages between 2012 and 2014.

IFC has an active direct private equity-style investment practice in India. It also lends to firms and has an active limited partner, or LP, portfolio in India where it backs PE and VC funds.

Last month, it committed to invest $20 million in IDG Ventures India’s third country-focused fund. The third fund has a target corpus of $200 million.

The World Bank arm has made debt investments in a number of companies in India. In September last year, for instance, it said it would invest up to $40 million in Bengaluru-based microfinance firm Ujjivan Financial Services Ltd via debt.

In the pharmaceutical sector, IFC has backed companies including Glenmark Pharmaceuticals Ltd, Vivimed Labs Ltd and Orchid Pharma Ltd, according to VCCEdge, the data research platform of VCCircle.

IFC said in June last year that it was looking to invest up to $75 million in Glenmark as part the drugmaker’s plans to raise $200 million for expansion.

In May 2014, IFC agreed to lend $147.5 million to Jubilant Pharma Ltd, the Singapore-based subsidiary of Jubilant Life Sciences Ltd.

In the broader healthcare sector, IFC last year decided to invest $65.8 million in Apollo Health and Lifestyle Ltd. IFC has also backed oncology chain HealthCare Global Enterprises Ltd and dialysis chain NephroPlus, among other healthcare companies.

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IFC to make $47.5 mn debt investment in Granules India

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