India's drug company Cipla announced that the government has approved a foreign investment in its subsidiary. The Indian government has permitted the Mauritius-based FIL Capital Investments to invest in Cipla Health Ltd., the subsidiary of Cipla.
In the company's filing, Cipla said that the approval was based on the recommendations of the Foreign Investment Promotion Board. "It appears that the government has, based on the recommendations of the Foreign Investment Promotion Board, approved the proposed investment by FIL Capital Investments (Mauritius) II Ltd in Cipla Health Ltd, a subsidiary of the company," Cipla stated in the filing.
The Mumbai-based drug company had formed the agreement with FIL Capital Investments in November last year. Cipla announced back then that the company and the investor have signed an agreement for its consumer healthcare business, as reported by The Times of India.
On January, Cipla received approval from the Competition Commission of India (CCI) over the proposed investment. However, the company still needs to seek approval from the Foreign Investment Promotion Board to be able to receive the investment and transfer the company's consumer healthcare to Cipla Health Ltd. Now that the approval is cleared, the investment is much more likely to be carried out, although it's reported that it is still subject to other undisclosed conditions.
Besides Cipla, the government, specifically the Foreign Investment Promotion Board, has also approved nine other foreign investment proposals recently and rejected five of them. The Economic Times listed the 10 companies that have been permitted to receive foreign investment. The list included ATC Asia Pacific Pte Ltd seeking for approval for an acquisition of 51 percent of the shareholding, involving inflow of Rs 5,8000 crore.
Other pharmaceuticals, such as Emcure Pharmaceuticals Limited and Glenmark Pharmaceuticals also got their proposals approved. Cipla's proposal itself was reported to worth Rs 145.22 crore. In total, the 10 approved foreign investment proposal involve an inflow of Rs 607 crore.
Indiainfoline reported that the drug maker is currently trading at Rs 516, which is below its previous closing. Previously, the company closed at Rs 524.05 on the BSE. It's also reported that the promoters holding in the company stood at 36.79 percent while Institutions and Non-Institutions held 34.79 percent and 26.33 percent respectively.
The approval from the Foreign Investment Promotion Board would allow Cipla to receive the foreign investment from Mauritius-based FIL Capital Investment, creating a Rs 145.22 crore inflow. The government have also cleared nine other proposals on foreign investment, with a total inflow of Rs 607 crore.
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