Rs 1,600 crore would be invested by Kotak Fund in Nimmagadda Prasad's API business

9 Oct 2023 , 09:12 AM

According to news reports, Kotak Strategic Situations Fund (KSSF), the alternative assets management fund of the Kotak Group, intends to invest around Rs 1,600 crore in the active pharmaceutical ingredients (API) company that Nimmagadda Prasad purchased from Viatris last week.

According to the reports, KSSF will support the $450 million (Rs 3,800 crore) acquisition with a $200 million capital round made up of a combination of structured debt and equity.

According to the news, the deal was also financed by Deutsche Bank, DBS, and Kotak. However, it was unable to determine the transaction’s precise structure.

In 2007, Mylan (now known as Viatris) purchased the API manufacturing company that Prasad, the creator of Matrix Laboratories, had owned. Iquest Enterprises was used to make the purchase. As the first close of the Kotak Strategic Situations Fund II (KSSF II), which will provide strategic solution financing to growth and value companies, Kotak Investment Advisors raised $1.25 billion in March. The sector-neutral fund will offer hybrid, debt, and equity financing.

One billion dollars have been fully invested in 14 companies by the first fund, Kotak Special Situation Fund I, including Rs 1,070 crore in Biocon.

AGS Transact Technologies, Sify Infinit Spaces, Gold Plus Glass Industry Ltd., TVS Supply Chain Solutions, DCW, cement player Sanghi Industries, and Nuvoco Vistas are some of its key investments.

Since its founding in 2005, Kotak Investment Advisors (KIAL) has raised more than $8.7 billion across a variety of asset classes, including infrastructure, listed strategies, real estate, private equity, and real estate.

Last year, Viatris put its non-core India companies up for sale, including API and the Famy Care women’s healthcare company. Although the company has significant exposure to the antiviral (ARV for HIV/AIDS) sector, which sees a relatively low amount of sales, the API sale process has not attracted any serious purchasers, ET reported.

Viatris sought an enterprise value of $600 million (Rs 5,000 crore) for the API company, which would have been six times its FY24 EBITDA figure, but it ultimately sold it for less.

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