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COMPETITION COMMISSION OF INDIA
Combination Registration No. C-2024/04/1139
07th March 2025
Proceedings under section 43A of the Competition Act, 2002 (Act) in relation to notice
filed under sub-section (2) of section 6 of the Act by Matrix Pharma Private Limited,
Mudhra Labs Private Limited, Mudhra Lifesciences Private Limited, Mudhra
Pharmacorp LLP, Kotak Strategic Situations India Fund II - a fund managed by Kotak
Alternate Asset Managers Limited, and Kingsman Wealth Fund PCC Aurisse Special
Opportunities Fund
CORAM:
Ms. Ravneet Kaur
Chairperson
Mr. Anil Agrawal
Member
Ms. Sweta Kakkad
Member
Appearances: Mr. Abhik Ghosh, Advocate
Order under Section 43A of the Competition Act, 2002
A.
BACKGROUND
1.
The Competition Commission of India (Commission) in its meeting held on 28th May
2024 had considered the notice dated 23rd April 2024 (Notice) received under sub-
section (2) of Section 6 of the Competition Act, 2002 (Act) filed by Matrix Pharma
Private Limited (Acquirer), Mudhra Labs Private Limited (Mudhra Labs), Mudhra
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Lifesciences Private Limited (Mudhra Lifesciences), Mudhra Pharmacorp LLP
(Mudhra Pharmacorp), Kotak Strategic Situations India Fund II (KSSIF/ Investor 1),
Kotak Alternate Asset Managers Limited (KAAML/ Investor 2), and Kingsman Wealth
Fund PCC Aurisse Special Opportunities Fund (Kingsman) [hereinafter, Mudhra Labs,
Mudhra Lifesciences, and Mudhra Pharmacorp are collectively referred to as the
Acquirer Holding Entities; Investor 1 and Investor 2 are collectively referred to as the
Investors; and, the Acquirer, Acquirer Holding Entities, Investors, and Kingsman are
collectively referred to as Acquirers/ Notifying Parties] and passed an order under sub-
section (1) of Section 31 of the Act approving the Proposed Combination (as defined
below), without prejudice to any proceeding under Section 43A of the Act (Order).
Description of the Parties
2.
Acquirer: The Acquirer is a private limited company incorporated in India in 2022 for
the purpose of acquisition of the Tianish Laboratories Private Limited (Target). It does
not have any subsidiaries or affiliates and does not presently carry out any business
activity either in India or outside India [hereinafter, the Acquirers and the Target are
together referred to as Parties].
3.
Acquirer Holding Entities: Mudhra Lifesciences and Mudhra Pharmacorp are the
shareholders of Mudhra Labs, which is the direct holding company of the Acquirer. In
other terms, Mudhra Labs is a subsidiary of Mudhra Lifesciences and an affiliate of
Mudhra Pharmacorp, and the Acquirer is a subsidiary of Mudhra Labs. Mudhra
Lifesciences and Mudhra Pharmacorp are controlled by Mr. Venkata Pranav Reddy
Gunupati (Pranav) who is also the majority owner in both entities. Accordingly, Pranav
is the ultimate beneficial owner and person in control of the Acquirer and the Acquirer
Holding Entities, which are all part of the same group.
4.
Acquirer Group: Pranav together with certain of his family members, also holds direct
and indirect investments in several other companies, several of which have been made
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through IQuest, which is also a party to the SPA. Accordingly, the entities over which
Pranav (including his family members) has: (a) direct or indirect shareholding of 10% or
more; or (b) a right or ability to exercise any right not available to ordinary shareholders
(including any advantage of a commercial nature); or (c) a right or ability to nominate a
director or observer, have been considered as the ‘Acquirer Group’.
5.
Investor 1: Investor 1 is a scheme of Kotak Strategic Situations Trust, a trust set up
under the Indian Trust Act, 1882 and registered with Securities and Exchange Board of
India (SEBI) as a Category-II Alternate Investment Fund.
6.
Investor 2: KAAML is the settlor and manager of Investor 1. Kotak Mahindra Bank
Limited holds, directly and indirectly, 100% of its shareholding. It acts as an investment
manager, engaged in the business of managing and advising funds across various asset
classes.
7.
Kingsman: Kingsman is incorporated as a protected cell public company limited by
shares in Mauritius and holds a Global Business License issued by the Financial Services
Commission (FSC), Mauritius. It is regulated by the FSC as an open-ended fund
classifying as a self-managed expert fund for the purposes of the Securities Act, 2005
and the Securities (Collective Investment Schemes and Closed-End Funds) Regulations,
2008. It is also registered as a foreign portfolio investor with SEBI.
8.
Target: The Target is a private limited company incorporated in India in 2023. It is a
wholly owned subsidiary of Mylan India, which in turn is an indirect subsidiary of Viatris
Inc. (Viatris), the ultimate parent company of the Viatris group (Viatris Group). The
Target does not have any subsidiaries or affiliates. The Target has taken over the active
pharmaceutical ingredients (API) manufacturing business (API Business) of Mylan
Laboratories Limited (Mylan India) and is engaged in the manufacture of APIs in India,
which business was formerly carried out by Mylan India and transferred to the Target
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pursuant to a scheme of demerger which was made effective from 1st March 2024.
Currently, the API Business of the Target comprises 290 APIs in its portfolio.
Transaction
9.
The Notice was filed with the Commission for approval of the following Combination:
i.
Purchase of equity shares of the Target by the Acquirer, constituting 100% of the
issued and paid-up share capital of the Target on a fully diluted basis (Proposed
Acquisition);
ii.
Proposed subscription to optionally convertible debentures of Mudhra Labs by
Investors (Proposed KSSIF/KAAML Investment);
iii.
Subscription to compulsorily convertible preference shares of Mudhra
Lifesciences by Kingsman (Kingsman Funding).
Since the Acquirer was receiving funding pursuant to the Proposed KSSIF/KAAML
Investment and Kingsman Funding, both were considered as inter-connected with the
Proposed Acquisition [together, the Combination].
10.
In addition to above, it was submitted in the Notice that in order to ensure funding for
the Acquirer to undertake the Proposed Acquisition, the Acquirer Holding Entities had
partly funded the Acquirer by way of investments from: (i) Mudhra Lifesciences by way
of subscription to equity shares and compulsorily convertible preference shares (CCPS)
in Mudhra Labs and (ii) Mudhra Pharmacorp by way of subscription to equity shares in
Mudhra Labs. Mudhra Labs in turn invested the proceeds of these investments received
by it in the Acquirer by way of subscription to equity shares, to be utilized by the
Acquirer for its acquisition of the Target in the Proposed Acquisition. The investments
by Mudhra Lifesciences and Mudhra Pharmacorp in Mudhra Labs and by Mudhra Labs
in the Acquirer are collectively referred to as the ‘Acquirer Funding’.
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11.
Regarding entities investing in Mudhra Lifesciences, it was mentioned that other than
Kingsman, Mudhra Lifesciences had received equity investment from Pranav, who is the
ultimate beneficial owner and person in control of Mudhra Lifesciences.
12.
Regarding entities investing in Mudhra Pharmacorp, it was stated that the minority
partners of Mudhra Pharmacorp are Govipri Infra LLP and Sujatha Ravuri, who had
contributed capital to Mudhra Pharmacorp in accordance with the Amended and Restated
Limited Liability Partnership Agreement dated 5th April 2024 entered into between
Pranav, Govipri Infra LLP and Sujatha Ravuri. Govipri Infra LLP is wholly owned by
family members of Mr. Pranav Reddy. Other than the above, Mudhra Pharmacorp LLP
had not received investments from any other person or entity.
13.
Regarding investment by Investors in Mudhra Labs through Optionally Convertible
Debentures (OCDs), it was submitted that the amount to be invested by the Investors
towards subscription of the OCDs was not yet remitted to Mudhra Labs and accordingly,
OCDs were yet to be issued by Mudhra Labs. It was stated that the investment amount
will be remitted and the OCDs will be issued only after all the conditions precedent to
the closing of the proposed investment by the Investors had been satisfied, including
obtaining the approval of the Commission. Upon receipt of the investment from the
Investors towards subscription of the OCDs, this amount would be further invested by
Mudhra Labs in the Acquirer, towards subscription of Compulsorily Convertible
Debentures. Further, it was clarified that the Investors’ knowledge of the Proposed
Acquisition was only limited to its own investment in Mudhra Labs which had not been
completed.
14.
The Parties confirmed that certain considerations relating to Acquirer Funding had been
paid prior to the filing of the Notice, as set out below:
i.
Kingsman Funding: On 5th April 2024, the investment by Kingsman in Mudhra
Lifesciences by way of subscription to CCPS was completed after being deemed to
