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Strides Shasun promoters raise Rs500 crore from KKR

LiveMint logoLiveMint 11-06-2017 Reghu Balakrishnan

Mumbai: The promoters of Bengaluru-based pharmaceuticals company Strides Shasun Ltd (formerly Strides Arcolab) have raised Rs500 crore from global private equity fund KKR & Co., according to two people aware of the development.

The money will be used to restructure existing loans as well as expand some of the businesses, said the first of the two people. The structured debt financing was done through KKR India Credit Opportunities Fund II, the person said on condition of anonymity.

With a market capitalization of Rs8,374 crore, Strides Shasun is a leading injectables company and owns eight manufacturing facilities globally, including six US Food and Drug Administration-approved facilities and two facilities for the emerging markets. 

In 2014, Strides Arcolab Ltd had acquired rival Shasun Pharmaceuticals Ltd in an all-stock transaction valued at about Rs1,200 crore and renamed the company Strides Shasun. The promoter group under Arun Kumar, founder and chairman of Strides Arcolab, holds about 31% stake in the company. “We don’t comment on our private family office affairs,” Kumar said.

In the last couple of years, Strides has made a series of acquisitions in India and globally. These include the generic portfolio of Aspen Pharmacare in Australia, CNS business of erstwhile Ranbaxy, brands portfolio from Johnson and Johnson, controlling stake in probiotics company Medispan, which was a part of the Chennai-based Shriram Group, in 2015 and a majority stake in Australian pharmaceutical and research firm Generic Partners Holdings Co. Pty Ltd last year.

KKR, which focuses on structured credit financing in India, is also in the process of raising its second India-focused structured credit fund KKR India Credit Opportunities Fund II worth Rs2,000 crore. The fund, which raised Rs1,100 crore from high networth individuals // and institutions in India, will start international marketing by next month, said the second person. The fund will be closed before the end of this calendar year, he added.

Its previous credit fund—KKR India Credit Opportunities Fund worth Rs1,500 crore, including co-investments, has been deployed completely and about Rs300 crore has been deployed from the new fund till date. 

In 2009, KKR India appointed B.V. Krishnan to boost its credit lending business. Previously, Krishnan was at Citigroup, where he worked as director, head of structured products for fixed income, currencies and commodities and equity capital markets, prior to which he worked as a senior banker in the corporate and investment bank at Citigroup. 

Through debt or structured financing, KKR so far has disbursed more than $3.5 billion to about 70 firms in India, including GMR Holdings Pvt. Ltd, Avantha Group, TVS Logistics, coaching firm Resonance Eduventures Ltd, Radiant Life Care Pvt. Ltd and Apollo Hospitals Enterprise Ltd. 

Besides credit funding, KKR has also entered the term loans market and is setting up an asset reconstruction company (ARC) to acquire debt-ridden companies and assets. Last month, KKR had disbursed a term loan of Rs110 crore to Bharat Gears Ltd, India’s largest automotive gear maker.

KKR’s Indian ARC would be the first Indian ARC which is 100% owned by a global PE firm. “The discussions with RBI (Reserve Bank of India) have been done and an approval for ARC is expected in a month’s time,” said the second person. 

KKR’s lending business in India is operated through three arms—KKR India Financial Services Pvt. Ltd, a non-banking financial company (NBFC); KKR India Alternative Credit Opportunities Fund, the first Alternative Investment Fund (AIF) raised by KKR India; and KKR India Asset Finance Pvt. Ltd, a realty-focused NBFC.

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