Avendus Future Leaders Fund (FLF) has made an investment of ₹300 crore in Aragen Life Sciences, a formidable CRDMO (contract research, development and manufacturing organization), through its private equity arm, Avendus Group.
The funding, which is made available from FLF’s most recent third fund (FLF III), was done in association with SBI Life Insurance. This is the second major deal for FLF III after its investment in La Renon Healthcare.
Aragen’s Leadership in Innovation
Founded in 2001, Aragen has been a recognized player globally in the pharmaceutical field with the leadership of Manni Kantipudi as the company has constructed a strong global presence. This is an end-to-end drug development process from early discovery to large-scale manufacturing, specifically focusing on novel molecules.
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The future is indeed bright for Aragen as it deploys technology platforms, artificial intelligence integration, and digital solutions to becoming a trusted partner for global pharmaceutical giants.
Avendus’ Market Perspective
Investment demonstrates full belief in “long term possibilities for the CRDMO sector in India,” according to Ritesh Chandra, Managing Partner of Avendus FLF. According to him, geopolitical contexts and supply chain diversifications trigger businesses to seek Indian partners.
“India has been on the fast track in manpower and manufacturing capabilities, giving it a competitive edge,” said Chandra. He projected that in the next three to four years, India’s share in the global CRDMO market would move up to 14%, nearly matching China, from 8% currently, somehow supported by industry growth rates of 16-17%.
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Impacts Shaping the Sector
Traditionally, the CRDMO market has been mainly in Europe and China. However, the combination of shifting trade policies and protectionist trends has urged multinational pharma firms to seek diversified sources.
India now has infrastructure and human capital that can exploit this strategic shift.
Future Investment Outlook
Avendus FLF is also considering investments in electronics manufacturing and engineering after two consecutive investments in the healthcare sector. Further, Chandra maintained a very cautious view with regards to urban consumer-facing businesses as he cited some slow demand.
However, he noted that rural consumption has held strong, which may offer selective investment opportunities.
With assets under management of over ₹3,750 crore, Avendus FLF backs late-stage leaders across various industries. Such names within its portfolio include Lenskart, Licious, FirstCry, SBI General Insurance, Zeta, Indegene, Veritas Finance, Juspay and Avanse Financial Services.
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