The Mukesh Ambani-promoted Reliance Life Sciences (Pvt) Ltd plans to float a life-sciences investment fund in India in equal partnership with a foreign venture capital company, according to K.V. Subramaniam, president and CEO of Reliance Life Sciences.
Subramaniam declined to speak on the size of the fund or the strategy behind it, but it is likely that the company is promoting the fund to increase its chances of being part of a break-through development in life sciences. People close to the development, who did not wish to be identified, said the fund will be floated in partnership with US-based venture capital firm MPM Capital LP, and have an initial corpus of $100-150 million (Rs410-615 crore).
Reliance Life Sciences has an existing relationship with MPM. In January, it invested about $30 million (Rs123 crore) in the firm’s new biotechnology fund, the $650 million MPM Bio Ventures IV, as part of an initiative to expand its presence to the US. “This investment will give us access to 80-100 small start-up biotech companies in the US where MPM Capital has invested. This access can be leveraged in terms of sharing technology from these companies as well as capturing drug development service outsourcing opportunities for Reliance Life Sciences in India,” said Subramaniam.
With a committed capital of more than $2.1 billion under active management, MPM Capital is the world’s largest venture capital investor in life sciences.
Reliance Life operates in the area of discovery and development of biotech-based healthcare products, as well as plant and industrial biotechnology. The company has a full-fledged clinical trial services arm, which caters to in-house as well as client-based drug development projects. It is also in the process of setting up three biopharmaceutical manufacturing plants for captive and contract manufacturing.
Reliance Life’s move to invest in small R&D companies could give it access to new technologies and research partnerships. Reliance Life recently acquired an Irish biotechnology firm, Genemedix for a similar reason.
Pharmaceuticals and health care are both fast-growing businesses in India. Over the past few years, some $8 billion worth of investment has been made in the sector. ICICI Bank Ltd, Citibank and Kotak Mahindra Bank Ltd have investments in the sector. And Yes Bank Ltd plans to set up India’s first dedicated fund for life sciences in collaboration with the Netherlands’ Gilde Investments. Yet another fund, APIDC-Venture Capital, a joint venture between Ventureast Group and the AP Industrial Development Corporation, invests only in biotechnology companies.
It isn’t known whether venture capital is covered in the agreement signed by Mukesh Ambani and Anil Ambani when they carved up the Reliance empire between themselves in 2006. Reliance Capital Ltd, the listed financial services company, a part of the Reliance Anil D Ambani Group (RADAG), is an active investor and has strategic stakes in several companies including apparel maker Celebrity Fashions (5% stake) and TV Today (12% stake) and Adlabs Films Ltd (54.91% stake).
A senior executive at Reliance Industries said the venture-capital firm, as well as a finance company RIL, hopes to start as an offshoot of its foray into consumer electronics retailing would function as “in-house” wings for the five years that the non-compete agreement is valid.