RPG Life Sciences is scouting for larger API assets as it looks to rapidly scale its API business and expand its footprint in overseas markets, Managing Director Ashok Nair told Business Standard.
The company has more than Rs 500 crore of capital available and is actively evaluating opportunities, particularly businesses that can add differentiated chemistry, regulatory access and US Food and Drug Administration (USFDA)-approved capabilities, Nair said.
"We have capital of Rs 500 crore-plus with us and are actively evaluating opportunities to strengthen our API business," Nair said. He added that the timing of further deals would depend on strategic fit, valuation, integration readiness and returns, rather than a predetermined acquisition count.
The Two Recent Acquisitions
RPG Active Pharma (RPGAP), a wholly owned subsidiary of RPG Life Sciences, agreed to acquire the API and intermediates business of Raghava Life Sciences for a consideration of up to Rs 135 crore.
The transaction is structured as a business transfer agreement on a going-concern basis through a slump sale and remains subject to customary closing conditions and regulatory approvals.
This followed RPGAP's July 29 acquisition of Actis Generics for Rs 80 crore, taking the combined consideration for the two transactions to Rs 215 crore.
RPG has described the Raghava transaction as part of a buy-and-build strategy to create a scaled, integrated API business.
The Raghava deal adds about 300 kilolitres (KL) of installed capacity at a facility located near Hyderabad.
The plant holds EU-GMP and WHO-GMP approvals, along with regulatory credentials including a Certificate of Suitability to the European Pharmacopoeia (CEP), EU Written Confirmation and Korea Drug Master File (KDMF) approval.
According to a regulatory filing, the Raghava acquisition will be funded in line with a recent equity raise announced by RPGAP. Quillan Partners acted as legal advisors, o3 Capital as financial advisors, and Deloitte conducted financial due diligence for RPGAP on the transaction.
Scale of the Combined Business
The two acquisitions have substantially changed the scale of RPGAP's operations.
Manufacturing capacity has increased from 110 KL to 505 KL, the product portfolio has expanded from 14 to 45 products, and the customer base has grown from 123 to more than 250, according to Nair.
Employee strength has risen from 217 to over 500, while the research and development pipeline has expanded from 12 products to 28.
Actis Generics and Raghava together generated approximately Rs 70 crore in revenue in FY26.
RPG sees scope to scale this considerably as it integrates the businesses and raises capacity utilisation. Nair said Raghava's 300 KL plant is substantially underutilised, and its existing infrastructure could support around Rs 200 crore of annual revenue at fuller utilisation without significant incremental capital expenditure.
RPG plans to pursue this through new customers, geographic expansion and integration with Actis and its existing API operations.
Strategic Rationale
The expansion comes as global drugmakers seek to diversify pharmaceutical supply chains and reduce dependence on China, a trend that has driven increased interest in India-based API manufacturing capacity in recent years.
RPG's stated strategy goes beyond simply adding manufacturing capacity. It includes acquiring products, complex chemistry capabilities, customer relationships and regulatory approvals that can support exports.
While USFDA-approved manufacturing capability is part of RPG's longer-term strategy, Nair said the company would not acquire a facility merely for that approval.
"The chemistry, product basket, customers, utilisation potential and economics must also be compelling," Nair said, adding that the company's export strategy extends beyond the US market.
RPGAP is being developed primarily as an independent merchant API and advanced-intermediates business rather than a captive supplier to RPG Life Sciences' formulations business.
Third-party customers, exports and selected contract development and manufacturing organisation (CDMO) opportunities are expected to constitute the larger growth opportunity for the unit, according to Nair.
Business Segments and Financial Context
RPG Life Sciences, part of RPG Enterprises, describes itself as an integrated, research-based pharmaceutical company operating in both domestic and international markets across branded formulations, global generics and synthetic APIs.
For the quarter ended June 2026, or Q1 FY27, RPG Life Sciences reported a 17% year-on-year rise in consolidated net profit to Rs 30.76 crore, on a 15.85% increase in revenue to Rs 195.69 crore, compared with the corresponding quarter of the previous fiscal year.
The company has previously indicated it was building sizeable cash reserves to pursue inorganic growth.
RPG Life Sciences remains debt-free and plans to deploy its available capital towards further acquisitions, manufacturing expansion, product development and regulatory access, according to the company.
What This Means for the Business Mix
The Actis Generics and Raghava Life Sciences acquisitions mark a shift in the relative scale of RPG Life Sciences' API operations compared with its formulations businesses.
With manufacturing capacity nearly five times larger than before the two deals, a broader product portfolio and an expanded customer base, RPGAP has moved from a smaller-scale API operation towards a more consolidated platform.
The company's stated intent to position RPGAP as a merchant API and advanced-intermediates supplier, rather than one focused primarily on internal formulations requirements, suggests API-related revenue could become a larger and more independent contributor to the group's overall business over time.
That outcome remains contingent on further acquisitions, integration progress and utilisation improvements at the acquired facilities.
Any additional transactions would depend on the availability of suitable targets that meet RPG's stated criteria around chemistry, regulatory credentials, customer access and economics, as outlined by the company's management.
Key Takeaway
RPG Life Sciences has accelerated its API expansion with Rs 215 crore of acquisitions through RPG Active Pharma and says it still has more than Rs 500 crore available for further inorganic growth. The company is now looking for larger API assets that can add differentiated chemistry, regulatory capabilities, export access and stronger economics.
Reader questions
Frequently asked questions
How much capital does RPG Life Sciences have available for acquisitions?
Managing Director Ashok Nair said RPG Life Sciences has more than Rs 500 crore of capital available and is actively evaluating additional API acquisition opportunities.
How much has RPG Life Sciences spent on its recent API acquisitions?
RPG Active Pharma agreed to spend up to Rs 135 crore on the API and intermediates business of Raghava Life Sciences after acquiring Actis Generics for Rs 80 crore, taking the combined consideration to Rs 215 crore.
What happened to RPG Active Pharma's manufacturing capacity after the acquisitions?
According to management, manufacturing capacity increased from 110 KL to 505 KL after the Actis Generics and Raghava transactions.
What type of API assets is RPG Life Sciences looking to acquire?
RPG is looking for assets that can add differentiated chemistry, attractive product portfolios, customer relationships, export access, regulatory credentials and strong utilisation economics. USFDA-approved capabilities are also part of its longer-term strategy.
Is RPG Active Pharma intended mainly to supply RPG Life Sciences internally?
No. Management has said RPG Active Pharma is being developed primarily as an independent merchant API and advanced-intermediates business focused on third-party customers, exports and selected CDMO opportunities.
How much revenue could the Raghava facility potentially support?
Management said the substantially underutilised 300 KL Raghava facility could support around Rs 200 crore of annual revenue at fuller utilisation without significant additional capital expenditure.
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