Avendus Fund leads Rs 300 Cr investment in Aragen Life Sciences

Avendus Future Leaders Fund III, the flagship private strategies vehicle of Avendus Group, has led a Rs 300 crore ($36 million) investment in Aragen Life Sciences, one of India’s largest contract research, development, and manufacturing organisations (CRDMOs). The deal, done in partnership with SBI Life Insurance, involves the acquisition of a minority stake.

This is the second investment from the fund’s third vintage, following its earlier backing of La Renon Healthcare in 2025. Avendus did not disclose the size of its stake in Aragen.

Founded in 2001 and headquartered in Hyderabad, Aragen provides end-to-end services for innovative pharmaceuticals, from early-stage discovery to commercial manufacturing, for both small molecules and biologics. Under chief executive Manni Kantipudi, the company has invested heavily in complex technology platforms, as well as digital and AI capabilities, to support global drug discovery and development.

“Our investment in Aragen reflects our strong conviction in the CRDMO market in India,” said Ritesh Chandra, managing partner of Avendus Future Leaders Fund. “As global pharmaceutical companies increasingly turn to India for drug research, Aragen is well-positioned to capture these tailwinds.”

Aragen counts Goldman Sachs and healthcare-focused investor Quadria Capital among its existing backers.

The company said the latest funding would broaden its shareholder base and strengthen its position as a partner to global pharma innovators.

“Aragen is a trusted partner in the CRDMO space for innovative pharmaceuticals,” Kantipudi said. “We are excited to welcome Avendus and SBI Life Insurance as long-term shareholders.”

Avendus Future Leaders Fund, which manages more than Rs 3,750 crore across funds, targets late-stage market leaders across sectors. Its portfolio includes Lenskart, Sagility, SBI General Insurance, Licious, Juspay, Zeta, Indegene, Veritas Finance, FirstCry and Avanse Financial Services. The firm has recently delivered exits, including the sale of its stake in Juspay Technologies in May 2025.

In February, Avendus Future Leaders Fund (FLF) acquired a minority stake in Ahmedabad-based formulations company La Renon Healthcare for Rs 160 crore.

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India’s CRDMO industry remains resilient 

India’s CRDMO sector has drawn increasing interest from global and domestic investors, buoyed by rising outsourcing of research and manufacturing by multinational drugmakers, cost advantages, and a growing talent pool in life sciences.

Estimates of the market’s size vary depending on whether they cover only CRDMOs or the broader CDMO category. India’s CDMO market is generally placed in the mid-teens of billions of US dollars today, with projections ranging from $15.6 billion in 2023 to over $44 billion by 2029, reflecting double-digit annual growth. 

The small-molecule CDMO segment alone is expected to exceed $12 billion by 2030. Globally, the CRDMO/CDMO market is worth about $140 billion, with India holding roughly a 2–3% share—a figure industry analysts believe could double over the next decade as more multinational drugmakers shift outsourcing to India.

The sector’s growth is being fueled by several factors: the steady expansion of global drug pipelines, the increasing complexity of therapeutics such as biologics and advanced modalities, and India’s ability to offer cost-effective, high-quality services supported by a maturing compliance record. 

Leading players include Syngene International, Piramal Pharma Solutions, Sai Life Sciences, and Anthem Biosciences. These companies operate across clusters such as Hyderabad’s Genome Valley, Bengaluru’s life sciences corridor, and Gujarat’s manufacturing hubs in Dahej, Ankleshwar, and Vapi, supplying primarily to the US and European markets.

While the United States remains a key demand center for Indian CRDMOs, recent changes in U.S. trade policy under the Trump administration have raised questions about tariff exposure. 

This year, Washington introduced new reciprocal tariffs affecting a range of Indian exports, with duties on some goods rising to around 50%. However, finished pharmaceutical products, classified under Chapter 30 of the Harmonized Tariff Schedule, were largely exempted from the India-specific increases announced in August. 

Since most CRDMO revenues come from services such as research, process development, and clinical manufacturing (rather than direct export of finished goods), the direct impact is expected to be limited.

Potential risks remain for shipments of physical goods such as active pharmaceutical ingredients (APIs), chemical intermediates, or drug substances if they fall outside exempt categories. These could face higher duties depending on their specific tariff classification. 

For now, sector analysts believe Indian CRDMOs are relatively insulated compared with industries such as textiles or gems, although companies with significant US-bound material shipments may need to monitor customs updates closely and consider restructuring supply chains to mitigate exposure.