₹215 crore on two acquisitions in 5 weeks: RPG Life Sciences targets bigger API expansion

RPG Life Sciences is looking to accelerate its expansion in the active pharmaceutical ingredients (API) business after spending ₹215 crore on two acquisitions in five weeks, as the drugmaker pursues a buy-and-build strategy aimed at adding scale, complex chemistry capabilities and a larger overseas footprint.

The acquisitions of Actis Generics and Raghava Life Sciences have sharply expanded the company's API platform, taking manufacturing capacity from 110 KL to 505 KL. Its API customer base has more than doubled from 123 to over 250, while the product portfolio has increased from 14 to 45 and the R&D pipeline from 12 products to 28.

The company has also expanded its API workforce from 217 to more than 500 employees.

In a conversation with Business Today, RPG Life Sciences Managing Director Ashok Nair said the company had laid the foundation for a larger API organisation by carving out the business into RPG Active Pharma and raising ₹243 crore by bringing on board a healthcare-focused private equity investor. The moves helped create a committed pool of ₹700 crore.

RPG Life Sciences subsequently acquired Actis Generics for ₹85 crore, adding manufacturing and backward-integration capabilities, followed by Raghava Life Sciences.

Raghava brings an approximately 300 KL manufacturing facility, 22 commercialised products, international approvals and established customer relationships. The acquisitions have also transformed the business from an API-only operation into a backward-integrated API and advanced intermediates platform.

The company is now evaluating further acquisitions and organic expansion as it looks to deploy another ₹500-700 crore over the next 12 months.

Its focus will be on opportunities that strengthen the manufacturing footprint, product portfolio and technical capabilities. The company is particularly interested in acquiring a large manufacturing site, preferably with USFDA approvals and a portfolio complementary to its existing operations.

RPG Life Sciences plans to remain focused on niche APIs involving difficult chemistry and multi-step synthesis rather than commoditised products. Such APIs typically have higher technical entry barriers, stronger customer stickiness and lower exposure to price erosion, according to Nair.

The additional capacity also offers significant headroom for growth. RPG Life Sciences' Navi Mumbai facility is operating at around 60% utilisation, while Actis is close to full utilisation. Raghava, however, is currently operating at only around 20%.

The company expects Raghava alone to generate around ₹200 crore in revenue once capacity utilisation reaches 70-80%. RPG Life Sciences is targeting collective utilisation of 75-80% across its three API manufacturing facilities as it extracts synergies from the acquisitions.

The API expansion forms part of RPG Life Sciences' broader ambition to reach around ₹2,500 crore in revenue by 2030. The company expects its domestic formulations business, currently at around ₹700 crore, to grow to about ₹1,200 crore, while APIs are targeted to contribute ₹500-700 crore. International formulations are expected to account for the remaining revenue.

The ₹2,500-crore target factors in the existing acquisitions and the balance acquisition pool of around ₹500 crore, but does not include potential future acquisitions in the formulations business.

Alongside APIs, RPG Life Sciences is widening its international footprint. Its international formulations business accounts for around 15% of the company's operations, with the company present in more than 60 countries.

It is expanding into markets including Africa, Canada, Saudi Arabia and Latin America. The company expects to commercialise naproxen in Canada by February 2027 after securing approval for an over-the-counter product.

RPG Life Sciences is also preparing to enter the fast-growing GLP-1 segment, with a launch planned for October. Nair said the company sees the category as an important opportunity, particularly given its existing presence in niche specialties.

The company has tied up with a research innovator for the product and expects its specialty-focused presence to help it carve out a share of the market. Nair expects India's GLP-1 market to grow to around ₹4,000 crore over the next three to four years.

The API push comes as RPG Life Sciences looks to complement its recent organic growth with selective acquisitions. The company said its stronger cash position and performance in recent years have created room to pursue inorganic opportunities while continuing to focus on both revenue growth and profitability.

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