Financial Daily from THE HINDU group of publications
Wednesday, Dec 25, 2002

News
Features
Stocks
Port Info
Archives

Group Sites

Corporate - New Projects
Markets - IPOs


Divi's Labs plans IPO to fund expansion

C.R. Sukumar

HYDERABAD, Dec. 24

DIVI'S Laboratories Ltd (DIL), the Hyderabad-based Rs 220-crore generic active pharmaceutical ingredients (APIs) and intermediates manufacturer, plans to tap the capital market with an initial public offer (IPO) shortly to raise funds needed for part-financing the proposed expansion programme.

According to the draft prospectus filed with the Securities and Exchange Board of India (SEBI), the company's subscribed and paid-up equity capital currently stands at Rs 11.54 crore.

Apart from plans to offer 12.69 lakh new equity shares of Rs 10 each, aggregating face value Rs 1.26 crore, the company also plans to offer 19.35 lakh equity shares of Rs 10 each for sale, aggregating face value of Rs 1.93 crore.

Though the company is yet to fix the date for the IPO and offer price for the two categories of fresh and existing shares, it expects a share premium of Rs 27.72 crore from the IPO.

The company, which currently has its manufacturing facility at Choutuppal near here, plans to increase its capacity by setting up a second facility at Chippada village in Visakhapatnam district of Andhra Pradesh.

Owing to this, the company is in need of funds to the tune of Rs 42.49 crore. While the institutions have agreed to extend a term loan of Rs 15 crore, the company plans to tap the capital market to raise the balance funds.

According to the company, the new manufacturing facility would provide comfort to its multinational customers of an alternative plant site and assured source of supply in case of any eventuality at one of the sites. The new manufacturing facility, on commissioning, would be similar to the present one and be initially utilised for manufacturing intermediates. After obtaining all the necessary approvals within a timeframe of 2-3 years, the company plans to produce APIs for advanced and regulated markets from this facility.

Divi's Labs aims at becoming one of the most cost-competitive manufacturers of APIs for the formulators in the open markets and be a supplier of choice to the formulators in the regulated markets. Towards this, the company has already obtained several approvals and clearance from regulatory authorities in the US and Europe, which the company expects, would enable it to sell several of its products in the regulated markets.

While the paid-up equity capital of the company would increase to Rs 12.81 crore from the current level of Rs 11.54 crore after the IPO, the holding of promoters would get reduced to 53.82 per cent from the current level of 59.74 per cent.

The offerers of existing shares through the proposed IPO would end up with a holding of 3.28 per cent on the expanded equity base as against the current stake of 20.4 per cent.

While the holding of associates would come down to 17.9 per cent from the existing level of 19.86 per cent, the public would acquire 25 per cent holding on the post-IPO equity.

Send this article to Friends by E-Mail
Comment on this article to BLFeedback@thehindu.co.in

Stories in this Section
New fuel-efficient engine from Audi?


Cos may not find it easy to change auditors any more
ICAI council may discuss Naresh Chandra proposals
JK Tyres claim to top slot misleading: MRF
Expert panel submits report on filgrastim
Crucial L&T board meet likely in Jan
IVRCL Infrastructure to raise public deposits
Hitachi to buy out partner in Amtrex Hitachi
CII hails Naresh Chandra Panel suggestions
Vigilance fears overdone, CVC tells PSE chiefs
Divi's Labs plans IPO to fund expansion
Falcon Graphite plans to make auto products
Law Ministry may have to redefine independent directors
`No tyre company here is big enough not to be gobbled up' - Mr Paras K. Chowdhary, MD, Ceat
IFGL to enter biomedical materials
Computer Sciences thinks big on India
Indian unit set to emerge Yamaha's largest arm
IREDA pays Rs 4-cr dividend to Govt


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line