New Delhi, Aug. 4 -- Homegrown private equity firm ChrysCapital and Bahrain's investment firm Investcorp are in the final stages of discussion to pick up stake in a local formulations manufacturer, at least two people aware of the development told VCCircle.

ChrysCapital, which has last week completed the acquisition of over 70% stake in Novartis India Ltd, and InvestCorp are said to be two of the final contenders to invest in Linux Laboratories Pvt Ltd, which is primarily focussed on central nervous system based domestic formulations, the aforementioned individuals said.

The Chennai-based firm is planning to raise $70 million (around Rs 668 crore) in this round of funding, one of the aforementioned individuals said. He added that the transaction is likely to include both primary and secondary components.

The company, which is backed by Tata Capital Healthcare Fund, has appointed investment bank Avendus Capital to scout for potential suitors.

Email queries sent to Linux Laboratories and the investors remained unanswered till the time of publishing this news article.

Background

Linux Laboratories was founded in 2007 by Hariharan P, Keeerthivasan K and Ananda Kumar S. The company manufactures and markets products across anti-epileptics, anti-psychotics, anti-depressants, nerve pain management, nutraceuticals, brain tonics and hypnotics categories.

The company claims to have a product portfolio of over 64 brands comprising 180 SKUs.

The firm had secured Rs 80 crore from Tata Capital Healthcare Fund II in 2021.

The firm had posted consolidated net sales of Rs 280 crore in FY25 versus Rs 248 crore a year earlier. Its PAT rose to Rs 25.9 crore from Rs 17.7 crore over the same period.

As for ChrysCapital, the firm's healthcare portfolio includes at least four other pharmaceutical and domestic formulation companies. These are La Renon Healthcare, Intas Pharmaceuticals, Eris Lifesciences and Corona Remedies. It had invested $70 million in Gujarat-based La Renon Healthcare in 2024.

The PE firm was reported to be evaluating more deals in the pharma space. VCCircle reported last year that ChrysCapital emerged as a frontrunner to invest in Aizant Drug Research Solutions Pvt., a local contract development and manufacturing organisation. Ltd.

Some of its notable exits in the pharma space so far include GVK Bio, Zydus Cadilla, Torrent Pharma, Ipca Laboratories, Curatio Healthcare and Mankind Pharma. It also partially exited Corona Remedies Ltd, as part of the drug formulations firm's initial public offering.

Investcorp on the other hand has struck several healthcare deals in the past. Some of them are V-Ensure Pharma Technologies Pvt Ltd, ASG Eye Hospital and Nephroplus.

The broader pharmaceuticals space in India has seen various consolidation moves by the local players and private equity firms. For instance, Sun Pharmaceuticals recently struck one of the largest biopharma deals in recent times with its buyout of women's health centric brand Organon. The deal size has been estimated to be around $11.75 billion.

Earlier this year, Everstone Capital, a Singapore-headquartered private equity firm that invests in India and Southeast Asia, had committed $270 million in Gujarat-based Apothecon Pharmaceuticals Pvt Ltd and its US-based sister concern Navinta.

In December, Senores Pharmaceuticals Ltd had acquired a Gujarat-based pharmaceutical company along with five of its drug applications for generic medicines as part of its push into regulated markets such as the UK and Canada.

Published by HT Digital Content Services with permission from VC Circle.