A consensus seems to have emerged within the government over FDI in brownfield pharma with the Foreign Investment Promotion Board (FIPB) clearing six FDI proposals worth R855 crore in its meeting on Monday.

The FIPB, headed by Arvind Mayaram, secretary, department of economic affairs, approved all six pharma investments proposals which came under its consideration. These included a R349-crore offer by German healthcare group Fresenius Kabi (Singapore) to acquire the entire public shareholding of Fresenius Kabi Oncology (formerly Dabur Pharma) through a voluntary delisting offer.

Earlier, the influential department of industrial policy and promotion (DIPP) had asked FIPB that such proposals be put in abeyance for fear of an adverse impact on the domestic industry. As FE had reported earlier, DIPP recently diluted its stance in favour of approving brownfield FDI proposals if the target Indian company’s domestic market share is below a threshold. The government is currently in the process of finalising a comprehensive FDI policy for the pharma sector.

Officials said that with the substantial number of brownfield FDI proposals cleared on Monday, it is an indication that the stalemate in the approval process for such investments due to policy imbroglio has ended.

In Fresenius Kabi Oncology, the promoter holds an 81% stake compared with a maximum of 75% allowed by Sebi’s public shareholding norms for listed private sector companies and needs FIPB approval to commence with the delisting. Fresenius had acquired 73.3% of anti-cancer drug maker Dabur Pharma for R878 crore in 2008.

Another proposal worth R200 crore by Calyx Chemicals & Pharmaceuticals to issue an IPO to investors, including foreign investors, to carry out the business of the pharma sector in India was also approved by the FIPB.

The R142 crore takeover of Alder Mediequip, an Indian producer of orthopaedic trauma products, by global medical technology firm Smith & Nephew was also given the nod. The acquisition, which was announced in May, gives Smith & Nephew a well-established platform to provide and develop products for the mid-tier market in India and for export. The other proposals approved include a R1.17 crore offer by Hyderabad based-Globion India, a R12.5 crore investment proposal by Andhra Pradesh based-Celon Labs and a R150 crore proposal by Lotus Surgical Specialities. However, FIPB did not take up the $1.6-billion buyout of Strides Arcolab?s injectables unit by US major Mylan.