Pharma Company Creates Dedicated API Subsidiary, Announces Strategic Investment and Actis Generics Acquisition to Accelerate Global Expansion

RPG Life Sciences has unveiled a major strategic transformation aimed at strengthening its position in the fast-growing Active Pharmaceutical Ingredient (API) industry. The company will carve out its API business into a separate wholly owned subsidiary, RPG Active Pharma, while healthcare-focused private equity firm InvAscent will invest up to ₹243 crore in the new entity.

The restructuring is part of a broader expansion strategy that includes acquisitions, capacity enhancement, product development and global market expansion. The company has also reiterated its ambition of achieving ₹1,000 crore in annual revenue by FY28, driven by faster growth in APIs, domestic formulations and international business.

Dedicated API Subsidiary to Drive Future Growth

RPG Life Sciences has decided to transfer its API business into RPG Active Pharma, enabling the segment to operate as an independent platform focused entirely on pharmaceutical ingredients.

The API division will be transferred through a slump sale, allowing the new subsidiary to pursue expansion opportunities with greater operational flexibility.

According to the company, the restructuring will enable:

• Faster execution of strategic initiatives.

• Dedicated management focus.

• Better capital allocation.

• Improved operational efficiency.

• Greater flexibility for acquisitions and partnerships.

Management believes the new structure will create a scalable API platform capable of competing more effectively in global markets.

InvAscent to Infuse Fresh Capital

Healthcare-focused private equity investor InvAscent will make an initial investment of up to ₹243 crore in RPG Active Pharma.

The strategic partnership also includes a broader investment plan, under which RPG Life Sciences and InvAscent together may invest up to ₹700 crore in multiple phases.

Investment Will Be Used For

• Expanding manufacturing capacity.

• Developing new API products.

• Strengthening research and process development.

• Upgrading manufacturing infrastructure.

• Pursuing strategic acquisitions.

• Supporting both organic and inorganic growth.

The fresh capital is expected to significantly strengthen the company's competitive position in the API industry.

Actis Generics Acquisition Strengthens Manufacturing Base

As part of its expansion strategy, RPG Active Pharma has signed an agreement to acquire the entire equity share capital of Visakhapatnam-based Actis Generics, an API manufacturer.

Although the financial terms of the transaction have not been disclosed, the acquisition is expected to:

• Increase manufacturing capacity.

• Expand product offerings.

• Improve production capabilities.

• Strengthen export competitiveness.

• Support long-term growth.

The acquisition remains subject to regulatory approvals and customary closing conditions.

API Business Stages Strong Recovery

The company's API business has rebounded strongly after operations resumed at its Navi Mumbai manufacturing facility, which had been disrupted following a fire last year.

API Business Highlights

• API contribution to FY26 revenue: 13.5%

• Q1 FY27 growth: 35.6% YoY

• Export contribution: Around 85%

• Domestic contribution: Approximately 15%

The recovery demonstrates improving operational efficiency and healthy demand across international markets.

Management expects the API business to contribute a larger share of total revenue over the next two years.

Mexico Emerges as a Key Export Market

RPG Life Sciences is strengthening its international presence by expanding exports to high-growth markets.

The company currently supplies APIs to:

• Mexico

• Canada

• Japan

• United Kingdom

• Vietnam

• Philippines

• Selected African countries

Management revealed that in one important product category, the company commands nearly 75% market share in Mexico, highlighting its strong competitive position.

The company intends to further strengthen its presence in Mexico while expanding into other emerging pharmaceutical markets.

Company Evaluating USFDA-Approved Assets

To accelerate global expansion, RPG Life Sciences is actively exploring acquisition opportunities, including facilities approved by the US Food and Drug Administration (USFDA).

Management stated that while India remains the primary focus, the company remains open to acquiring overseas assets if they strengthen its strategic positioning.

Such acquisitions could provide access to regulated pharmaceutical markets and expand the company's global manufacturing footprint.

API Product Pipeline to Support Long-Term Growth

The company has outlined an ambitious product development strategy for its API business.

Growth Roadmap

• Launch at least five new APIs every year.

• Execute a three-year API development pipeline.

• Expand exports into regulated markets.

• Increase the API segment's contribution to total revenue.

• Enhance manufacturing capabilities.

These initiatives are expected to support sustainable long-term growth and improve operational scale.

Domestic Formulations Continue to Lead Revenue

While the API segment is receiving greater strategic focus, domestic formulations remain the company's largest business.

Domestic Formulations Performance

• Contribution to FY26 revenue: 68.9%

• Q1 FY27 growth: 14.8%

• Indian pharmaceutical market growth: 11.6%

The company outperformed the broader pharmaceutical market during the quarter, indicating continued market share gains.

Naprosyn Brand Continues to Deliver Strong Growth

One of the company's flagship brands, Naprosyn, continued to perform well during the quarter.

Key developments include:

• 16% growth during Q1 FY27.

• Target to become a ₹100 crore brand in FY27.

• Launch of Naprosyn ES in India.

• Planned launch of an over-the-counter version in Canada through Walmart.

The expansion of the Naprosyn portfolio is expected to support both domestic and international growth.

International Formulations Business Gains Momentum

RPG Life Sciences is also strengthening its international formulations business.

The company has entered into a partnership with a UK-based pharmaceutical company under a Contract Development and Manufacturing Organisation (CDMO) model.

Initially:

• Three products will be developed.

• Commercial production is expected within six months.

The collaboration is expected to diversify revenue streams while improving manufacturing utilisation.

Healthy Quarterly Financial Performance

The company reported another strong quarter, supported by growth across all major business segments.

Q1 FY27 Financial Performance

The improvement in profitability reflects stronger operational efficiency and a favourable business mix.

Roadmap Towards ₹1,000 Crore Revenue

RPG Life Sciences remains confident of achieving its ambitious target of ₹1,000 crore annual revenue by FY28.

The growth strategy will be driven by:

• Faster API expansion.

• Continued strength in domestic formulations.

• International market expansion.

• Strategic acquisitions.

• Capacity enhancement.

• New product launches.

• Growth in CDMO operations.

Management believes these initiatives will create a more diversified and scalable pharmaceutical business over the next few years.

Opportunities and Risks Ahead

Key Growth Opportunities

• Rising global demand for APIs.

• China+1 sourcing strategy.

• Expansion into regulated markets.

• Capacity expansion.

• Product innovation.

• Strategic acquisitions.

• Increasing pharmaceutical exports.

Key Risks

• Delays in regulatory approvals.

• Integration risks from acquisitions.

• Raw material cost inflation.

• Pricing pressure in export markets.

• Currency fluctuations.

• Geopolitical uncertainties.

Successful execution of the company's expansion strategy will be crucial in delivering sustainable earnings growth.

Market Outlook

RPG Life Sciences' strategic decision to separate its API business and bring in private equity capital reflects the growing importance of pharmaceutical ingredients in India's healthcare manufacturing landscape. The investment by InvAscent, coupled with the acquisition of Actis Generics and a planned investment pipeline of up to ₹700 crore, strengthens the company's ability to expand capacity, enter new markets and compete in the global API industry.

For the broader pharmaceutical sector, the announcement reinforces the positive outlook for Indian API manufacturers as global pharmaceutical companies continue diversifying supply chains under the China+1 strategy. Investors should monitor the progress of the restructuring, integration of acquisitions, expansion into regulated markets and execution of new product launches. If RPG Life Sciences successfully scales its API business while maintaining profitability in its formulations segment, the company could strengthen its competitive position and support its target of reaching ₹1,000 crore in annual revenue by FY28.