Indian Pharma No Longer A Growth Tonic For FIIs


Saddled with heightened USFDA scrutiny, a strong rupee, weak commercial potential of drugs in the pipeline, the Indian pharmaceutical sector is turning out to be a bitter pill for several large global investors. The high sectoral risks have also led to several marquee foreign institutional investors (FIIs) cashing out of their equity positions in several companies. The latest disclosure of shareholding pattern for the quarter ended March 2017 reveals that funds as diverse as Abu Dhabi Investment Fund (ADIA), Temasek, Oppenheimer & Co and T Rowe Price, among others, have reduced their shareholding in large Indian pharma stocks like Sun PharmaBSE -2.23 %, LupinBSE -0.82 %, Dr Reddy's and CiplaBSE -1.29 % (see table). The combined market cap erosion of the top five Indian pharma companies has been Rs 1,500 crore over the last one year. 

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