Financial Daily from THE HINDU group of publications
Friday, Mar 03, 2006
Markets - IPOs
Hetero Drugs plans to tap capital market next fiscal
The company plans to spend Rs 150 crore for bulk drugs manufacturing capabilities and Rs 100 crore on finished dosages unit.
To focus on around 50 globally proven therapeutic drugs where the patents expired.
Hyderabad , March 2
Hetero Drugs Ltd, the Hyderabad-based pharmaceutical company with leadership position in anti-retrovirals, may tap the capital market some time during next fiscal, according to its Chairman and Managing Director, Dr B. Parthasarathy Reddy.
Aimed at doubling its topline in the next 5-6 years, the Rs 1,000-crore company is in the process of expanding its manufacturing capabilities keeping in view the needs of export markets. The company proposes to set up a Rs 250-crore modern facility at Visakhapatnam, Dr Reddy told Business Line.
The company plans to spend Rs 150 crore for bulk drugs manufacturing capabilities and Rs 100 crore on finished dosages unit. Both the facilities would take off in the next couple of years, Dr Reddy said.
"In a low-interest regime, we foresee no problem in raising low-cost funds for implementing our projects. However, some of the global investors have been showing keen interest in picking up holding in our company. Keeping this in view we may consider IPO some time during next fiscal. We may dilute our holding in a limited way. However, we would not be interested in tapping the market for an amount less than Rs 500 crore," Dr Reddy said.
Buoyed by the recent success of emerging the first Indian pharma company to obtain sub-licence from Roche to manufacture bird flu drug (Tamiflu), Hetero Drugs has chalked out a two-pronged growth strategy.
As a part of this, the company proposes to focus on around 50 globally proven therapeutic drugs where the patents expired. The second strategy is to screen at least 100 products in the next few years and aggressively file drug master files in the regulated markets. Hetero currently has a product portfolio of 40 drugs.
According to Dr Reddy, following the company's proven performance in producing and supplying sub-licensed drug much before the deadline, Hetero has been receiving enquiries from several MNCs for sub-licensing their drugs to the Indian company.
"At present, we are actively negotiating with a couple of MNCs in this direction," he said.
Assurance to MNCs
Hetero proposes to ensure comfort to the MNCs by assuring them that the company would respect the original patents and it would in no way compete with its customers.
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