Laurus Labs Announces ₹833 Crore JV Investment in Collaboration with Slovenian Firm

Laurus Labs on Tuesday said it has committed an investment of USD 1,500,000 in KRKA Pharma, a joint venture between the company and Slovenia-based KRKA d.d. Laurus Labs Board approved the investment of ₹833 crore in KRKA Pharma at a board meeting which was held on 6 March 2025. In the same vein, KRKA d.d., the co-venturer, will also put ₹867* crore. Under this investment, both the KRKA d.d. and Laurus Labs will continue to hold 51:49 shareholding ratio, respectively in the special purpose vehicle.

The funds from this substantial investment will be primarily used to purchase land, with an initial investment in creating a new manufacturing facility under the KRKA Pharma brand. This facility will be dedicated to the production of finished pharmaceutical products for new markets, including the Indian market. Laurus Labs stated that the same strategic move is in line with the company's underlying growth plans and long-term business direction.

KRKA Pharma was registered in April 2024 but has not yet activated operational activities. The present investment, which will be complete by 31st Mar 2025, will be a cash subscription by Laurus Labs towards 83.3 million equity shares of ₹10 per share in KRKA Pharma.

This news in the pharma space comes on the back of a season of bustling activity across different pockets of the Indian market, as mentioned in earlier news. This joint venture investment by Laurus Labs is on par with the ongoing growth of the business ecosystem in India.

Combined expertise and the necessary manufacturing footprint with investments from Laurus Labs and KRKA d.d. is a step towards penetrating emerging as well as domestic markets. Such a facility for finished products from the same business may also lend itself to further value addition in their operations. With a target completion of the investment by end-March 2025, the timeline points to a quick execution to fulfil their aspirations for growth.

The announcement clearly mentions that the investment will be for land acquisition and initial setup costs, but the exact revenue impact and market share from the investment will be underpinned by how swiftly the new facility is established and how well will it penetrate to intended markets. Investors would be keenly watching this venture and its overall impact on Laurus Labs' financials in future periods. The fact that while this transaction clearly comes under related party transactions whereas it is being executed at arm’s length price indicates due diligence undertaken with respect to getting the right value for an investment.

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