IOL Chemicals & Pharmaceuticals Ltd has decided to offload 5% stake to private-equity funds to raise some Rs 80 crore.
MUMBAI: IOL Chemicals & Pharmaceuticals Ltd has decided to offload 5% stake to private-equity funds to raise some Rs 80 crore.
The company has already begun talks with four overseas private-equity funds based in Singapore and the US, sources said.
The deal is expected to be sealed by the end of the first quarter of the current fiscal.
Varinder Gupta, managing director, IOL Chemicals & Pharmaceuticals, declined to comment on this but said: “The company will inform to the stock exchanges if any arrangements are finalised and approved by the board.”
Analysts believe that company needs funding for setting up a manufacturing facility for Rabiprazole, an anti-ulcer drug, at a capital expenditure of Rs 75 crore. It will make rabiprazole and its series (omerprazole, esmoprazole, lansoprazole and pantoprazole) to strengthen the pharmaceuticals business of the company.
Rabiprazole is used to treat gastroesophageal reflux disease (GERD) and Zollinger-Ellison syndrome. It is used in combination of other medications to eliminate Hpylori, a bacterium that causes ulcer.
The company has purchased land for the project and technical discussions with domestic and foreign suppliers of machinery are at an advanced stage.
Rabiprazole will go off patent in 2009, which will boost the demand for the product in India and offer opportunities in overseas markets.
In September, the $2 billion Mauritius-based foreign institutional investor Indiastar picked up 18.5% of the equity stake in IOL Chemicals.
Its clients include United Phosphorus, Rallis India, Ranbaxy Laboratories, Nector Life Science and so on. It is also exporting products to countries like Bangladesh, Dubai, Libya, Lebanon, Thailand, Syria and Singapore.
The company is also strengthening its existing R&D facilities by installing additional infrastructure for further development on new molecules and process validation.
It’s also setting up facilities for manufacturing of monochloro acetic acid and acetyl chloride.
Under backward integration programme, the company has planned to set up a plant for iso-butyl benzene, which is a raw material for manufacturing of ibuprofen the capacity of the plant would me 6000 tpa.
r_mithun@dnaindia.net
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