ICICI Venture Funds up stake in Arch Pharmalabs to 31%

New Delhi, Nov 7: India Advantage Fund-VI, the two billion dollar fund managed by ICICI Venture Funds Management Company, has increased its stake in Arch Pharmalabs to 31 per cent.

This is the second round of investment by ICICI Venture, which currently has an existing stake in the company through a mezzanine transaction from its previous fund.

The proceeds of this would be used for both organic as well as inorganic growth opportunities in the manufacturing and services side.

''We believe that Arch Pharmalab will continue to grow rapidly in the CRAMS segment and become a dominant player. The company has built a very competent management team who have shown the ability to identify, pursue and successfully execute opportunities,'' said ICICI Venture CEO and MD Renuka Ramnath.

IL&FS Investment Managers and Swiss Technology Venture Fund are the two other private equity investors who have existing investments in the company.

Arch is one of India's largest pure play intermediate player engaged in the manufacturing of pharmaceutical intermediates and APIs.

Arch has embarked on an expansion plan at its Gurgaon site to quadruple its existing capacity. As part of this, the company is setting up manufacturing facilities for high potency compounds in the oncology segment.

It is now in the process of expanding the use of this technology for the manufacture of other compounds. The company is expecting its first USFDA inspection in the second half of 2007.

The pharma industry in India is expected to grow to 9.4 billion dollars by 2010. India is currently among the top five pharmaceutical manufacturers in the world and Arch is well placed to take advantage of this opportunity.

It is successfully moving up the value chain and has enhanced its product portfolio beyond Penicillin.

''With the current business profile and the potential contracts which encompass manufacturing, services and co-marketing alliances with Indian producers, Arch is poised to cross the Rs 500 crore mark within the next two years,'' Arch Pharmalabs CEO Ajit Kamath said.

Besides Arch Pharmalabs, ICICI Venture has made significant investments in other Life Sciences companies including Avesthagen, Metropolis, Malladi and Perlecan Pharma in partnership with Dr Reddy's Laboratories.

ICICI Venture Funds Management Company, the Rs-260-crore firm recorded a stellar performance registering a CAGR of 50 per cent over a period of three years.

UNI