‘Hyderabad Pharma City to attract investments’

Several pharma companies such as Granules India, Laurus Labs, MSN Laboratories, Syngene, Novartis and Sandoz have expanded significantly in Hyderabad in the last few years.

By   |  Published: 26th Sep 2020  12:59 pm

Hyderabad: Hyderabad has a world-class pharmaceuticals ecosystem backed by integrated infrastructure facilities for life sciences companies and a vast pool of talent from renowned academic and biological research institutions. The upcoming Hyderabad Pharma City will give further boost to companies that are planning to invest in Hyderabad for both greenfield and brownfield expansion, says an expert.

Several pharma companies such as Granules India, Laurus Labs, MSN Laboratories, Syngene, Novartis and Sandoz have expanded significantly in Hyderabad in the last few years. Many medium size companies and startups have also taken up expansion.

Speaking about the growth pattern, Srinivas N, MD, Industrial and Logistics, Savills India, told Telangana Today, “New investments in Hyderabad by pharma companies have largely been towards research & development and innovation centres. The city has seen significant real estate investments from the life sciences industry.”

Telangana is likely to attract sizable investment into the sector for the purpose of land acquisitions, production facilities, R&D bases, built-to-suit, and plug and play facilities.

On cluster development, he said, pharmaceutical companies prefer setting up their manufacturing plants in pharma parks and SEZs due to the availability of talent, supportive amenities & infrastructure, and presence of allied industries. In addition, there are benefits and incentives associated with being present in clusters, parks and SEZs. Hyderabad Pharma City will attract investments for offering these benefits.

FDI inflows

Hyderabad in particular and India in general has attracted FDI investments in the pharmaceuticals sector consistently over the last few years. Indian pharma attracted FDI worth Rs 3,649.8 crore ($517.79 million) in FY-2019-20 up by 98.1 per cent from Rs 1,842.1 crore ($265.97 million) in FY-2018-19 as per the Department for Promotion of Industry and Internal Trade.

“We anticipate an increase in FDI from current levels in the next 2-3 years due to the growing attractiveness of the market and demand. In FY 2019-2020, real estate investments by top 35-listed pharma companies in India has been around Rs 520 crore, an increase of 15 per cent over FY 2018-19 period, as per the annual reports of these firms. These investments have been primarily towards land acquisition,” added Srinivas.

Several large multinationals are entering into licensing agreements to manufacture Covid-19 drugs and vaccines in India. The sector is likely to attract foreign majors to set up their production and R&D bases due to the size of the domestic market, ‘China Plus One’ strategy, incentives, skilled labour at lower cost and government spending on creation of supportive infrastructure.

Srinivas further forecasts, there could be an uptick in investments in FY 2020-21 from real estate and private equity funds in rental yielding assets, asset acquisitions, joint venture partnerships, debt funding and development management. Investments could grow by 25-30 per cent.

Founded in the UK, Savills is a global property consultant with operations across Americas, Europe, Asia Pacific, Africa and the Middle East.


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