Increased Investment in Two Key Biotech Companies by Direct Investment Funds Explained
India's biotechnology sector is on the rise, with the Union Budget 2025-26 bolstering its growth through increased funding and initiatives. Two biotech companies, Sai Life Sciences Ltd and Biocon Ltd, have recently attracted significant interest from Domestic Institutional Investors (DIIs), as their DII holdings have seen a substantial increase.
Sai Life Sciences Ltd, a company offering integrated services across the pharmaceutical lifecycle, has seen its DII holding rise sharply from 12% at listing to 22% by June 2025. This substantial increase of over 8 percentage points within one quarter is a testament to the company's strong financial growth. Sai Life Sciences Ltd has recorded impressive sales growth, with its sales increasing at a compounded annual growth rate (CAGR) of 18%, growing from Rs 725 crore in FY2020 to Rs 1,642 crore in FY2025. Its EBITDA also grew at 18% CAGR, rising from Rs 170 crore to Rs 390 crore over the same period. This consistent operational growth and profitability improvement have evidently caught the eye of DIIs.
Biocon Ltd, a company engaged in the business of manufacture of biotechnology products and research services, has also seen its DII holdings jump significantly. The DII holdings in Biocon Ltd jumped from 16% as off the quarter ending March 2025 to 23% as of the quarter ending June 2025. Biocon's sales grew at a compounded rate of 19% from Rs 6,300 crore in FY20 to Rs 15,262 crore in FY25. EBITDA for Biocon more than doubled from Rs 1,575 crore in FY20 to Rs 3,254 crore in FY25, logging in a compounded growth of 16%. Biocon ranks in the top 5 global players in biosimilars and among the top 3 in insulins, and its business is entering a phase of accelerated growth, as per the company's May 2025 investor presentation.
Despite these positive developments, Biocon faces ongoing pricing pressure and regulatory dependencies. Its share price, which was around Rs 400 in August 2020, is currently at Rs 352 as of 8 August 2025. In contrast, Sai Life Sciences Ltd's share price was around Rs 760 when it was listed in December 2024, and as of 8 August 2025, it stands at Rs 840, marking an almost 11% jump in just about 9 months.
The biotech sector in India, one of the top 12 biotechnology markets in the world and the third largest in the Asia-Pacific region, is projected to reach US$ 300B by 2030. With the growing interest from DIIs and the supportive Union Budget, the future of the biotechnology sector in India looks promising.
- The substantial increase in DII holdings in Sai Life Sciences Ltd, a company offering integrated services across the pharmaceutical lifecycle, shows the attractiveness of the company to investors given its strong financial growth and impressive sales growth of 18% CAGR.
- Biocon Ltd, with its business in the top 5 global players in biosimilars and among the top 3 in insulins, has also experienced a significant increase in DII holdings, and the company's sales and EBITDA have grown at compounded rates of 19% and 16% respectively.
- Despite facing pricing pressure and regulatory dependencies, Biocon's promising future is reflected in the growing interest from DIIs, supported by the Union Budget, and the sector's projection to reach US$ 300B by 2030.
- Investors may find attractive opportunities for portfolio growth in India's biotechnology sector, given the impressive financial growth of companies like Sai Life Sciences Ltd and Biocon Ltd, resulting in increased DII holdings.
- The rising biotechnology industry in India, driven by supportive finance measures and technological advancements, presents ample opportunities for investors to consider in their lifestyle, particularly in trading sectors related to finance and technology.
