Cipla to Invest Additional INR 26 Cr in Achira Labs

Upon the completion of the first tranche of the new investment, Cipla’s stake in Achira Labs will increase to 27.27% of the total voting rights.

Pharmaceutical giant Cipla has inked definitive agreements to further invest up to INR 26 Cr in Achira Labs, an associate company.

The investment will be made through optionally convertible preference shares, disbursed in four tranches. The strategic financing is intended to enable Achira to commercially launch and further develop test panels.

Further, the completion of the transaction is contingent upon the achievement of certain milestones, per a company statement.

Bengaluru-based Achira Labs deals in the development and commercialization of point-of-care medical test kits in India. It has made significant strides in product development and R&D since Cipla’s previous investment in June 2022.

Upon the completion of the first tranche of the new investment, Cipla’s stake in Achira Labs will increase to 27.27% of the total voting rights.

Commenting on the development, Achin Gupta, CEO, One India Business, Cipla said, “Our decision to invest more in Achira is backed by Cipla's commitment to advance in the PoC diagnostics space. With the aim to reduce the existing gap in the ecosystem, our strategic financing will enable Achira to commercially launch and further develop test panels".

Recounting the Previous Deal

Earlier in June 2022, Cipla had made a strategic investment of INR 25 Cr in Achira Labs, acquiring a 21.05% stake in the company.

This investment was aimed at advancing Cipla’s footprint in the point-of-care (PoC) diagnostics space. Since this investment, Achira has made significant strides in product development and R&D, further validating Cipla’s decision.

Founded in 2009, Achira Labs is a pioneering technology company based in Bengaluru, India. It aims to develop healthcare solutions that empower patients and doctors with convenient and timely access to accurate medical testing in underserved markets. The company is known for its use of microfluidic technology in developing regulatory-approved medical diagnostic products.

Cipla’s Recent Bets

Recently, the promoter family of the pharma major Cipla announced to offload a 2.5% stake in the company through block deals, potentially raising INR 2,650 Cr. Reportedly, the shares will be offered in the price range of INR 1,289-1,357 per share.

At the lower end of the price band, the stocks would be sold at a discount of 5% from Cipla's closing price on Tuesday. As of March 2024, the promoters hold nearly 33.5% of the company.

Promoters Yusuf Khwaja Hamied and Mustafa Khwaja Hamied plan to sell the stake to institutional investors, potentially generating up to INR 1,849 Cr ($244.6 million).

In another significant development, Cipla joined hands with Skye Air Mobility to offer drone-powered medicine delivery in Himachal Pradesh. With this initiative, the companies sought to ensure the timely delivery of medicines to chemists and clinics in remote areas while mitigating the risk of compromising cold chain products due to temperature fluctuations.

Cipla Limited, an Indian multinational pharmaceutical company, was founded in 1935 by Dr Khwaja Abdul Hamied. Headquartered in Mumbai, Cipla primarily focuses on developing medication to treat a variety of medical conditions, including respiratory disease, cardiovascular disease, arthritis, diabetes, and depression.