New Delhi: FIPB will take up on Monday GlaxoSmithKline's Rs 6,400 crore FDI plan, the largest foreign investment proposal in the pharma sector this fiscal.
There are seven other FDI proposals related to the pharma sector that are scheduled to be taken up by the Foreign Investment Promotion Board (FIPB), headed by Economic Affairs Secretary Arvind Mayaram.
According to sources, the Singapore subsidiary of the UK- based GlaxoSmithKline proposes to buy 24.33 percent stake or 2.06 crore equity shares in GlaxoSmithKline Pharmaceuticals Ltd through an open offer.
The acquisition would result in foreign exchange inflows to the tune of Rs 6,400 crore, they added.
FDI inflow in the pharma sector during the April-October period totalled Rs 5,956 crore (USD 1.08 billion).
In September, the government cleared the Rs 5,168-crore deal of the US-based Mylan Inc for acquiring Bangalore-based pharma firm Agila Specialties, a subsidiary of Strides Arcolab.
In 2008, Japanese firm Daiichi Sankyo had bought out the country's largest drug maker Ranbaxy for USD 4.6 billion. US-based Abbot Laboratories had acquired Piramal Health Care's domestic business for USD 3.7 billion.
Other pharma sector proposals that are on FIPB agenda for January 13, include Laurus Labs (Hyderabad), Hospira Pte Ltd (Singapore) and KKR Floorline Investments PTE (Singapore).
The FIPB is taking up the pharma sector proposals against the backdrop of the government deciding to retain the policy of allowing 100 percent foreign investment in the existing pharma firms, brushing aside concerns about non-availability of affordable drugs in view of MNCs takeovers.
India allows 100 percent FDI in pharma sector through automatic approval route in the new projects, but foreign investment in the existing companies are allowed only through the FIPB approval.
In total, the FIPB would consider 22 FDI proposals across various sectors on Monday.
First Published: Sunday, January 12, 2014, 14:59