Tube Investments to foray into CDMO business, signs agreement with former Aurobindo MD

Tube Investments will be investing Rs 285 crore as part of this deal and N Govindarajan will invest up to Rs 15 crore in the form of equity and compulsorily convertible preference shares (CCPS). Based on this, Govindarajan will get up to 25 percent equity of the subsidiary.

The proposed investment is subject to satisfactory completion of the conditions precedent in the agreements between the two parties.

N Govindarajan is the former Managing Director of Aurobindo Pharma, who stepped down in October 2021 after being at the helm for over a decade. He will also be the CEO of the subsidiary company.

CDMO is one of the fastest growing segments in the pharmaceutical industry as big pharma players are increasingly outsourcing R&D and manufacturing to focus on core business activity.

Tube Investments called its foray into the CDMO business to be in-line with its plan to diversify its business portfolio and reduce dependency on traditional revenue streams.

The company is also looking to expand its presence in the Electrical Vehicles business. TI Clean Mobility Pvt. Ltd. (TICMPL), a wholly-owned subsidiary of Tube Investments of India Ltd., is looking to raise Rs 3,000 crore to fund its Electric Vehicle expansion plans.

It has signed definitive agreements with its parent Tube Investments, Multiples Private Equity Fund III, State Bank of India (SBI) along with other co-investors to raise as much as Rs 1,950 crore in the form of equity and Compulsorily Convertible Preference Shares (CCPS).

Shares of Tube Investments are down 3 percent so far this year.