Indian Economy News

Glenmark plans to raise US$ 200 million, IFC to participate with US$ 75 million commitment

Chennai: Pharma major Glenmark is planning to raise around $200 million, of which International Finance Corporation (IFC) is planning to invest upto $75 million. The company plans to raise the money through market issuance of quasi-equity instruments.

IFC said that the proposed investment of upto $75 million to be used for expanding manufacturing capacity (primarily in India); building R&D capacity for new products (including in India); and reduce debt so that internal accruals can be deployed to R&D.

The company is looking for IFC to be a long term partner, when it is developing new products that will take several years to be commercially launched. IFC is a patient investor who can reduce funding uncertainty in the long term, and avoid frequent trading which can cause volatility in stock price. Having IFC as an anchor investor in this round of fund-raise will also help attract other investors, which is important during a time of volatile markets.

The proposed fund raising of $200 million is to support company's expansion of domestic manufacturing of the company and for a "significant" amount in capital expenditure over the next three years across its facilities in India.

Glenmark has 17 manufacturing facilities globally, of which 13 are in India. The majority of the company's manufacturing facilities are in tier-2/3 locations, including in Indore, Ranipool and Sikkim, respectively.

The company also plans to launch several new products in India and other emerging markets over the next three years covering cardiology, diabetes, dermatology and respiratory, all of which are major healthcare issues in India.

The project concept includes investment in developing a novel drug pipeline to meet unmet medical needs, which will be patented to the company. Over the long term, Glenmark plans to launch these products globally.

Glenmark, a publicly-listed company, is promoted by Saldanha family, which holds 46.48% in the company and public shareholders hold the remaining 53.52%, as of March 31, 2016. Founded in 1977, Glenmark is a leading Indian manufacturer of generic pharmaceuticals and is engaged in the development, manufacturing, and marketing of pharmaceutical products and active pharmaceutical ingredients (APIs) in India and internationally, and offers products in a range of therapies including respiratory, dermatology, cardiovascular and oncology.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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