MO Alts acquires majority stake in Megafine Pharma for Rs 460 crore

Industry:    16 hours ago

Motilal Oswal Alternate Investment Advisors (MO Alts) has announced its first sole control investment, acquiring a majority stake (over 60 per cent) in Megafine Pharma, a Mumbai-based export-focused Active Pharmaceutical Ingredient (API) company.

The investment, totalling Rs 460 crore, will go to existing shareholders and will be used to bolster Megafine’s research and development (R&D) capabilities while expanding its manufacturing infrastructure. The company has ambitious plans to increase its production capacity by 50 per cent over the next two years.

Megafine currently operates two USFDA-approved manufacturing facilities located in Nashik, Maharashtra, and Vapi, Gujarat, and specialises in niche, high-margin APIs, primarily used in chronic disease management, such as cardiovascular and physiotherapy drugs.

MO Alts has also indicated a broader strategic vision that includes inorganic growth through acquisitions. The goal is to integrate other high-margin, niche API manufacturers into Megafine’s platform, further strengthening its market position.

The Sanghvi family, one of the founding promoter groups of Megafine, has also increased its stake as part of the transaction; however, the exact percentage remains undisclosed.

Despite the competitive nature of the API industry, MO Alts remains optimistic about Megafine’s growth trajectory. According to Rohit Mantri, managing director and co-head of private equity at MO Alts, regulatory compliance remains a key focus, particularly maintaining approvals from Indian, US, and European regulatory bodies. However, he emphasised that India’s self-reliance policies and global supply chain diversification from China present favourable opportunities for API manufacturers like Megafine.

 

As India’s API sector continues to grow at a double-digit rate, driven by increasing outsourcing and cost advantages, MO Alts also revealed that 25-30 per cent of its fund allocations are dedicated to the pharmaceutical and healthcare sectors. The firm continues to actively seek investment opportunities in the space.

 

Megafine is fully integrated, producing its own intermediates and adhering to Environmental, Social, and Governance (ESG) standards. The company’s facilities operate as zero-discharge units, ensuring effective water management and compliance with sustainability practices.
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