Betting Big On Healthcare

07, October, 2021: PE fund Somerset invests in Gujarat-based bulk drug firm in first pharma bet.

Somerset Indus Capital Partners has picked up a minority stake in Gujarat-based Globela Pharma Pvt Ltd, marking the healthcare-focused private equity firm's first bet in the pharmaceutical space in India. 

The private equity firm has invested over $10 million (Rs 74.4 crore) in Globela from its second fund, Somerset partner Mayur Sirdesai told VCCircle.

Globela is engaged in formulations and active pharmaceutical ingredients (APIs) and has a strong presence in emerging and rest of the world (ROW), or non-major market, countries, he said.

"We believe that the organisation, with its strong execution capabilities and Somerset's network in these markets, could create a unique positioning for Globela in emerging markets in the years ahead,” Ramesh Kannan said, marking the occasion.

Globela, launched in 1998, is known for supplying therapeutic drugs across several categories including gastrology, anti-bacterial, anti-diabetics and cardiovascular drugs. 

The company had posted net sales of Rs 87.4 crore during fiscal year 2019-20 as against Rs 76.1 crore a year before, as per VCCEdge, the financial data and research platform of VCCircle.  

Somerset, which is among the few healthcare-focused funds in the country, invests across four broad verticals: medical technology (consumables, devices and equipment), diagnostics products and services, healthcare delivery (asset-light models), and life sciences. 

The private equity firm is currently investing out of its second fund. The fund has already made two bets in regional hospital chain Apex Hospitals Pvt Ltd and med-tech distribution platform GenWorks Health Pvt Ltd. 

The second fund has a target corpus of $80 million. It has already exceeded the $75 million mark, Somerset partner Ramesh Kannan told VCCircle in an interview in August this year. 

In August, the debut fund of the private equity firm also made its first partial exit via an initial public offering (IPO) from Krsnaa Diagnostics. Previously, Somerset fully exited Sandor Medicaids in 2016 via a secondary deal and partially exited Cygnus Hospitals via a strategic transaction in January 2020.  

The debut fund is aiming for four more exits over the next two years, Kannan had said.

The current year has seen a handful of other pharmaceutical deals this year. Earlier this week, Singapore state investor Temasek Holdings agreed to invest Rs 540 crore ($73 million) in pharmaceuticals-focused platform Integrace Pvt Ltd in which private equity firm True North holds a significant majority stake. 

Last month, Aurobindo Pharma acquired a 51% stake in generic veterinary pharma firm Cronus Pharma Specialties India for Rs 420 crore ($56 million).

This story is published by VOH Team.