Pharma major steps up its buy-and-build strategy, targeting differentiated chemistry, regulatory capabilities, international customers and export opportunities
Mumbai: RPG Life Sciences is stepping up its expansion in the Active Pharmaceutical Ingredients (API) business and is scouting for larger acquisition opportunities after committing around ₹215 crore to two acquisitions within five weeks.
The pharmaceutical company has more than ₹500 crore of capital available and is actively evaluating businesses that can strengthen its API platform through differentiated chemistry, regulatory access, established customer relationships and international market capabilities.
RPG Life Sciences Managing Director Ashok Nair said the company is evaluating opportunities to further strengthen its API business, but stressed that future acquisitions would depend on strategic fit, valuation, integration readiness and expected returns rather than a fixed acquisition target.
Two Acquisitions Worth ₹215 Crore
RPG Life Sciences has accelerated its API expansion through two transactions.
Its wholly owned subsidiary, RPG Active Pharma (RPGAP), recently agreed to acquire the API and intermediates business of Raghava Life Sciences for consideration of up to ₹135 crore.
The transaction follows RPGAP’s acquisition of Actis Generics for ₹80 crore, announced on July 29, taking the combined consideration of the two transactions to approximately ₹215 crore.
The Raghava transaction is being pursued on a going-concern basis through a slump sale and remains subject to customary closing conditions and regulatory approvals.
RPG has described the move as part of a buy-and-build strategy aimed at creating a larger, integrated and scaled API business.
API Business Gets a Major Scale-Up
The acquisitions have significantly expanded RPG Active Pharma’s manufacturing footprint, product portfolio and customer base.
According to the company, its manufacturing capacity has increased from 110 kilolitres (KL) to 505 KL, while its product portfolio has expanded from 14 to 45 products.
The customer base has also grown from 123 to more than 250, while employee strength has increased from 217 to over 500. Its R&D pipeline has expanded from 12 to 28 products.
This gives RPGAP a significantly broader platform from which to pursue domestic and international API opportunities.
Raghava Deal Adds 300 KL Manufacturing Capacity
The acquisition of Raghava’s API and intermediates business brings an additional 300 KL of installed capacity to RPGAP.
The manufacturing facility is located near Hyderabad and spans approximately nine acres. It has a dedicated R&D setup and holds WHO-GMP and EU-GMP approvals.
The acquired business has a portfolio of 29 API assets, comprising 22 commercialised products and seven development-stage products across therapeutic areas including diabetes, cardiovascular and central nervous system treatments.
It also comes with international regulatory credentials, including Certificate of Suitability (CEP), EU Written Confirmation and Korea Drug Master File (KDMF) approvals.
Underutilised Plant Offers Significant Growth Opportunity
One of the key attractions of the Raghava acquisition is the potential to improve utilisation of its existing manufacturing infrastructure.
The facility is currently substantially underutilised, providing RPGAP with an opportunity to increase production and revenue without requiring significant incremental capital expenditure.
The company believes the existing infrastructure could support annual revenue of around ₹200 crore at higher utilisation levels.
RPG plans to drive this growth by adding new customers, expanding into new geographies and integrating Raghava’s operations with Actis Generics and its existing API business.
USFDA Capabilities on the Radar
Access to US Food and Drug Administration (USFDA)-approved manufacturing capabilities remains part of RPG Life Sciences’ longer-term strategy.
However, the company has indicated that it will not pursue an acquisition simply because a facility has USFDA approval.
Instead, potential targets must offer a compelling combination of chemistry capabilities, product portfolio, customer base, utilisation potential and attractive economics.
This approach suggests that RPG is looking beyond individual manufacturing plants and is seeking strategic assets that can contribute to sustainable commercial growth.
Focus Extends Beyond the US
Although the US is an important market, RPG Life Sciences’ international expansion strategy is broader.
The company is looking for businesses that can provide access to multiple regulated markets, international customers and established regulatory approvals.
The strategy is aimed at creating an API platform capable of serving customers across different geographies rather than relying heavily on a single export market.
RPG Active Pharma to Operate as an Independent API Platform
RPG Life Sciences is positioning RPG Active Pharma primarily as an independent merchant API and advanced-intermediates business, rather than simply as a captive supplier for its parent company’s formulations business.
The larger opportunity lies in expanding third-party sales, exports and selected Contract Development and Manufacturing Organisation (CDMO) opportunities.
This model could allow RPGAP to diversify its customer base while creating a standalone growth platform within the broader RPG Life Sciences group.
Global Supply Chain Diversification Creates Opportunity
RPG’s acquisition strategy comes amid a broader effort by global pharmaceutical companies to diversify their supply chains and reduce excessive dependence on China.
Indian API manufacturers are increasingly looking to capitalise on this shift by offering reliable manufacturing, regulatory compliance, complex chemistry and access to multiple global markets.
RPG’s strategy combines these elements with acquisitions that can immediately add capacity, products, customers and regulatory credentials.
₹500 Crore+ Capital Provides Acquisition Firepower
RPG Life Sciences has more than ₹500 crore of capital available, giving the company considerable flexibility to pursue additional strategic opportunities.
The company has previously announced plans to build its API platform through a combination of acquisitions, manufacturing expansion, product development and international growth. It is also working with healthcare-focused private equity investor InvAscent, which committed up to ₹243 crore as part of the API business expansion plan.
The broader investment framework envisages significant capital deployment into the API platform over the coming years.
Stronger API Platform Could Drive Future Growth
RPG Life Sciences’ core business also continues to show growth momentum. In Q1 FY27, the company reported consolidated revenue of ₹195.69 crore, up 15.85% year-on-year, while net profit rose 17% to ₹30.76 crore.
The API expansion therefore represents an additional growth avenue alongside the company’s branded formulations and global generics businesses.
If RPGAP succeeds in integrating its recent acquisitions, increasing capacity utilisation and winning new international customers, the API business could become a substantially larger contributor to the group’s overall growth.
What Investors Will Watch
The next phase of RPG Life Sciences’ API strategy will likely be closely monitored for:
- New and larger API acquisitions
- Utilisation of the newly added 300 KL Raghava capacity
- Integration of Actis Generics and Raghava
- Expansion of the API product portfolio
- Growth in third-party customers
- Export growth across regulated markets
- USFDA-related manufacturing capabilities
- Development of new APIs and advanced intermediates
- Potential CDMO opportunities
- Revenue and profitability growth of RPG Active Pharma
Key Numbers at a Glance
| Parameter | Key Detail |
|---|---|
| Recent acquisitions | 2 |
| Combined consideration | ₹215 crore |
| Raghava acquisition | Up to ₹135 crore |
| Actis Generics acquisition | ₹80 crore |
| Available capital | ₹500 crore+ |
| RPGAP capacity | 110 KL → 505 KL |
| Raghava capacity | Around 300 KL |
| Product portfolio | 14 → 45 |
| Customer base | 123 → 250+ |
| R&D pipeline | 12 → 28 products |
| Raghava commercialised APIs | 22 |
| Raghava development-stage APIs | 7 |
| Potential annual revenue from fuller Raghava utilisation | Around ₹200 crore |
Bottom Line
RPG Life Sciences is moving aggressively to build a scaled, integrated and internationally competitive API business.
With two recent acquisitions worth approximately ₹215 crore, more than ₹500 crore in available capital, an expanded manufacturing footprint and access to a wider product and customer base, the company now has the financial and operational platform to pursue larger opportunities.
The key question will be whether RPG can successfully convert the newly acquired capacity, products and regulatory credentials into higher utilisation, stronger exports and sustainable profitability.
For investors, the company’s next acquisition—and how effectively it integrates its existing assets—could be an important indicator of how quickly RPG Life Sciences can transform its API business into a major growth engine.
Source: Business Standard reports and RPG Life Sciences corporate disclosures.
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₹500 Cr+ Capital | Bigger Acquisitions Ahead
