Chryscapital paid Rs 1,400 crore for Novartis India, a company with just 57 employees and no sales team. The private equity firm aims to build a pharma platform by buying established brands, but its listed entity is shrinking and trading at a steep 60X EV/Ebitda. Public shareholders, who own 29% of the renamed Evonile Pharma, now face a rights issue to fund this aggressive expansion.
How We Got Here
Chryscapital put down Rs 1,400 crore for a 70.68% stake in Novartis India in June, renaming it Evonile Pharma. The deal aimed to leverage Novartis's well-known brands by creating a new sales and distribution platform from the ground up.
The Numbers
- Evonile Pharma needs Rs 885 crore via a rights issue, priced at Rs 860 a share, to primarily repay debt.
- This debt funded Evonile's Rs 1,250 crore acquisition of Pfizer's blood pressure brand, Minipress XL.
- The new entity's strategy involves acquiring established brands from multinational drugmakers and out-selling their previous owners.
- Indian pharma is traditionally founder-driven, with only 4 takeovers in branded medicines before Evonile, compared to 32 PE buyouts across the broader pharma sector since 2016.
- Evonile trades at 60X EV/Ebitda, double that of fast-growing Mankind Pharma, despite its revenue shrinking over the last three years.
What Happens Next
🇮🇳 Why This Matters for India
For Indian drugmakers in Hyderabad and Ahmedabad, this deal signals a new deep-pocketed competitor for valuable brand acquisitions, potentially inflating M&A prices.
The Take
This is a massive bet on execution, not just capital. Chryscapital is building a pharma platform from scratch in a market dominated by incumbents; expect a tough fight for sales reps and distribution, making their 60X EV/Ebitda multiple a daring gamble on future growth.
Source:
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