InvestorQ : Has COVID really made the global PE funds more interested in the Indian pharma API space?
vidhya Laxmi made post

Has COVID really made the global PE funds more interested in the Indian pharma API space?

Answer
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sarah Leo answered.
3 weeks ago


PE funds have been showing interest in Indian CMO players well before COVID-19. As soon as Chinese chemical manufacturers faced pressure over environment violations, supply of APIs from China got disrupted in 2018. That marked the beginning of interest in Indian API makers.

After COVID, global pharma wanted to de-risk supply chains to reduce reliance on China. India was the only feasible alternative. That, in a way, explains the surge in interest in the India API and CRAMS story. COVID-19 provided the impetus but it could be the next big idea.

After the rather successful, pharma outsourcing and IT outsourcing story in the last 25 years, India has lacked a good export story. If India is serious about boosting exports, the real big opportunity could lie in the CRAMS and API story and India surely has an edge there.

Let us admit that Indian API and CRAMS are still small by Chinese standards but COVID scenario provides the right opportunity for India to move in. API and CRAMS companies are richly valued but could see exponential growth. That will be an exciting story.