RPG Life Sciences has begun searching for larger active pharmaceutical ingredient (API) assets after completing two acquisitions totaling 215 crore rupees over five weeks. The company's goal is to accelerate its business development in the API sector and expand its presence in international markets.
According to Managing Director Ashok Nair, the company possesses capital exceeding 500 crore rupees, which is actively being used to evaluate potential deals. Particular interest is shown in enterprises capable of bringing differentiated chemistry, access to regulatory bodies, and export opportunities, including approvals from the U.S. Food and Drug Administration (USFDA).
Nair emphasized that the timing of future transactions will depend on strategic alignment, valuation, readiness for integration, and expected returns, rather than a predetermined number of purchases.
Acquisition Process
A week ago, RPG Life Sciences' subsidiary, RPG Active Pharma (RPGAP), signed an agreement to purchase the business of manufacturing APIs and intermediates from Raghava Life Sciences for up to 135 crore rupees. This acquisition followed a deal on July 29th when Actis Generics was bought for 80 crore rupees, bringing the total to 215 crore rupees across the two transactions.
RPG characterized the deal with Raghava as part of a 'buy-and-build' strategy aimed at creating a large, integrated API business. These acquisitions have significantly scaled up the company's operations.
According to Nair, RPG Active Pharma's production capacity increased from 110 kiloliters (KL) to 505 KL, the product portfolio grew from 14 to 45 items, and the client base expanded from 123 to over 250 clients. The workforce increased from 217 to over 500 people, and the research portfolio expanded from 12 to 28 products.
This growth occurs against the backdrop of a global trend among drug manufacturers to diversify pharmaceutical supply chains and reduce excessive dependence on China. RPG's strategy goes beyond simply increasing capacity; it involves acquiring products, complex chemical capabilities, customers, and regulatory permissions that can support exports.
Details of the Raghava Life Sciences Acquisition
Raghava adds approximately 300 KL of installed capacity at its facility near Hyderabad. This plant is certified according to EU-GMP and WHO-GMP standards, and the business holds regulatory documents such as the Certificate of Suitability to the European Pharmacopoeia (CEP), EU Written Confirmation, and the Korean Drug Master File (KDMF).
Although USFDA-approved manufacturing capability is part of RPG's long-term strategy, Nair noted that the company would not acquire a facility solely for obtaining this approval. He added that 'chemistry, product basket, customers, utilization potential, and economics must also be convincing,' stressing that the company's export strategy is broader than just the US.
Together, Actis and Raghava generated revenues of about 70 crore rupees in fiscal year 26, but RPG sees significant prospects for scaling this figure through enterprise integration and increased capacity utilization.
Nair reported that the 300 KL Raghava plant is currently underutilized, and the existing infrastructure could support an annual revenue of around 200 crore rupees at full capacity without substantial additional capital expenditure. RPG plans to achieve this by attracting new clients, geographical expansion, and integration with Actis and its current API operations.
RPGAP is developing primarily as an independent trading business for APIs and advanced intermediates, rather than as a captive supplier for RPG Life Sciences' own prescription drug business. Nair clarified that greater growth potential lies in working with third parties, exports, and selected Contract Development and Manufacturing Organization (CDMO) opportunities.
The company remains debt-free and intends to direct capital towards further acquisitions, production expansion, product development, and regulatory access.