Jackson Labs' IPO to raise Rs 100 cr

Amritsar-based Jackson Laboratories Private Ltd will hit the capital market with an initial public offer (IPO) in the middle of 2006-07 to raise up to Rs 100 crore.

The firm manufactures 700 types of pharmaceutical formulations (tablets, capsules, liquid & dry powder syrups, eye/ear drops).

The proceeds from the issue will be used to set up a unit at Taliwal in Himachal Pradesh, create value-added products and new drug delivery systems, and finance R&D projects. Jackson Laboratories is the third company from Amritsar to float an IPO, after Khanna Paper Mills and Amritsar Swadeshi Woolen Mills.

Speaking to Business Standard, Managing Director Jugal Kishore said, "It is all because the Himachal government is giving tax sops and several other things to promote industries, in contrast with the Punjab government. Although the Punjab government has announced relaxation in excise by bringing it down to 8 per cent from 16 per cent, a lot needs to be done to boost industry."

The company has invested around Rs 100 crore in setting up an integrated assembly unit, expected to be operational in June.

Jugal Kishore said the new unit will be confined to the United States food & drug guidelines. "Once the new unit is operational, there will be a three-fold increase in production," said Kishore.

The existing unit has the capacity to produce around 4.5 million pharmaceutical formulations per day (including tablets, capsules, liquid & dry powder syrups, eye & ear drops). With the combined production of the two units, the company is targeting more than Rs 100 crore in 2006-07.

The company is also doing R&D in beta-blockers, and anti-asthmatic and analgesic drugs and is expecting to roll out these products in April. It is also planning to launch branded generics very soon.

In the last financial year, the turnover of the company was Rs 35 crore and in this financial year the company is targeting Rs 40 crore. Exports were Rs 10 crore, with products mainly exported to Japan, the Philippines, Vietnam, Argentina, Brazil, Bhutan, Nepal and Afghanistan.

"We are planning to explore markets in Germany and Scandivian countries," Kishore said, adding the thrust would be on the global markets and institutional businesses like hospitals and nursing homes.