MSPEA commits $25m to India's ZCL Chemicals
Morgan Stanley Private Equity Asia (MSPEA) has invested INR1.7 billion ($25 million) in ZCL Chemicals, an India-based pharmaceuticals company that focuses on niche therapeutic areas such as the central nervous system, antiretroviral treatments and controlled substances.
The capital will be used to help ZCL consolidate its existing market position and expand its product portfolio to include anti-diabetic treatments and anti-coagulants, among others. It claims to have posted compound annual growth of 30% over the last five years.
Established in 1991 as Zandu Chemicals, the company has three major manufacturing segments: active pharmaceutical ingredients (APIs), particularly for central nervous system disorders such as attention deficit hyperactivity disorder (ADHD); advanced intermediaries used in a range of narcotic APIs; and contract manufacturing of APIs and intermediaries.
More than 90% of ZCL's revenue comes from developed markets and it has received accreditations from regulatory bodies including the US Food & Drug Administration, the World Health Organization, the Korea Food & Drug Administration, and Japan's Ministry of Health. The company is headquartered in Mumbai and has research and development facilities in Gujarat.
"ZCL has emerged as a promising company within the space, and has put in place the building blocks for its future growth, with their focus on research and development, and their emphasis on quality and governance," Nirav Mehta, co-head of MSPEA's India operations, said in a statement.
Much of MSPEA's India exposure is in financial services. Earlier this year it invested INR1.14 billion in Five Star Business Finance, a non-banking finance company (NBFC) that specializes in small ticket business and housing loans. The GP has also participated in several rounds for microfinance lender Janalakshmi Financial Services.
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