RPG Life Sciences Eyes Another Acquisition With ₹500 Crore Capital Pool

RPG Life Sciences Puts Acquisition Capital Behind Its API Ambitions

A fresh deal could extend the company’s manufacturing reach as it works to integrate recent acquisitions and lift capacity use.

A further acquisition would build on recent deals

The Mumbai-based drugmaker has already used around ₹200 crore of a committed ₹700-crore capital pool. It is looking for another asset, ideally one with US Food and Drug Administration approval or synergies with its existing operations. The target is to deploy approximately ₹500 crore on an acquisition within the next 12 months.

That capital allocation follows RPG Life Sciences’ acquisitions of Actis Therapeutics and Raghav Lifesciences, backed by private equity firm InvAscent. The company expects the businesses to contribute ₹70 crore to ₹80 crore in revenue over the next six months. Management says the deals have expanded manufacturing capacity fivefold and doubled the customer base.

The opportunity is accompanied by an integration task. Revenue from the acquired assets will depend on bringing them into the group’s operations and building customer activity; the company says it will focus on scaling these businesses while continuing to assess further inorganic opportunities.

API growth plan pairs acquisitions with existing capacity

RPG Life Sciences is targeting 25% annual growth in its API business over the next five years through a combination of organic expansion and acquisitions. It transferred the business to RPG Active Pharma, a wholly owned subsidiary, and brought InvAscent in as a strategic partner to give the API operation dedicated capital and management focus. The parent company continues to build its formulations business.

Management estimates that existing facilities could generate around ₹450 crore in revenue without significant additional investment. Higher utilisation, new customers and entry into Europe and South America are among the stated routes to growth. This gives the company an organic capacity opportunity alongside the acquisition strategy, although reaching that potential will require demand and execution to follow through.

Quarterly growth offers a starting point, not a guarantee

In the September quarter, revenue rose 16.5% year on year to ₹211.6 crore, taking quarterly revenue above ₹200 crore for the first time. Adjusted EBITDA increased 15%, excluding one-time acquisition costs, while gross margins expanded 260 basis points.

Management attributed the margin improvement to product mix, strategic inventory building and customer price increases, despite higher freight, solvent and packaging costs. It reported no supply pressures. The figures show growth and improved gross margins in the quarter, but investors will need to distinguish ongoing performance from acquisition-related costs as the new assets are integrated.

The company also cited a recovery in international formulations as part of its outlook, with a growing presence in regulated markets including Europe and Canada, and newer markets in Latin America and Africa. It has secured tenders in some Latin American markets and completed its first CDMO project on time. These developments could broaden its revenue base, though the source does not quantify their expected contribution.

Oncology pricing and semaglutide widen the commercial agenda

RPG Life Sciences does not expect the government’s trade margin cap on cancer medicines to materially affect sales or margins. While maximum retail prices for oncology brands including Ivzumab, Densurak, Denbri and Debrumab have to be reduced, management expects its own selling prices to remain broadly unchanged. It sees improved affordability as a possible route to more patients receiving treatment and stronger volumes across its oncology and speciality portfolio.

The company also plans to use its specialist-doctor network, particularly in nephrology and rheumatology, to promote its recently launched generic semaglutide. The commercial opportunity will depend on execution and uptake; no sales target was provided.

Key Highlights

• RPG Life Sciences is targeting an acquisition of about ₹500 crore within the next 12 months.
• It has deployed around ₹200 crore of its committed ₹700-crore capital pool.
• Actis Therapeutics and Raghav Lifesciences are expected to add ₹70 crore to ₹80 crore in revenue over the next six months.
• The company aims to grow its API business by 25% annually over five years.
• September-quarter revenue increased 16.5% year on year to ₹211.6 crore, while gross margins expanded 260 basis points.

Investor Note: The acquisition pipeline offers RPG Life Sciences a way to accelerate its API ambitions, but the investment case will depend on disciplined deal selection, integration and the company’s ability to convert available capacity into sustained revenue. Investors may also track how much of the reported growth comes from acquired assets and how margins evolve as expansion continues.