The transaction values Piramal Pharma Ltd at $2.775 billion, with an upside component of $360 million.

US private equity firm The Carlyle Group will acquire 20 per cent stake in Piramal Enterprises' pharmaceutical business for $490 million in its fourth and biggest healthcare deal in India.

The transaction values Piramal Pharma Ltd at $2.775 billion, with an upside component of $360 million depending on the company's performance during 2020-21, Piramal Enterprises said in a statement.

The proceeds from the deal will be used as growth capital for the pharma businesses to expand existing capacities as well as to tap attractive acquisition opportunities within and outside India. In the interim, the proceeds from this capital raise may also enable us to further strengthen our balance sheet through deleveraging in the near term,” it added.

Greg Zeluck, Co-head, Carlyle Asia Partners advisory team, said: “This investment marks the beginning of an important partnership with the Piramal family, and further underscores our commitment to the Indian market. India is a hugely strategic part of Carlyle's Asia business, and a market where we continue to see many attractive investment opportunities where we believe we can collaborate with management teams to drive long-term value for companies and stakeholders.”

The transaction is expected to close in calendar year 2020.