Nectar Life to set up three new units

Nectar Lifesciences, a Chandigarh-based pharmaceutical manufacturer and exporter, plans to use the proceeds of its initial public offer (IPO) for setting up three additional production units.

Vivek Kaushik, president, told reporters on Monday, "While the proposed formulations facility at Baddi is estimated to cost Rs 3.12 crore, the other two units, one a Sterile Cephalosporin plant at Derabassi and another R&D plus Corporate Quality Control Centre would be constructed with an investment of Rs 3 crore and Rs 2.50 crore respectively."

The IPO opens on June 22 and closes on June 28. The offer, which shall comprise fresh issue of 3,870,000 shares of face value Rs 10, has been priced in the Rs 200-240 band and would constitute 26 per cent of the fully diluted equity capital. After the issue, the company's paid-up capital would increase from Rs 11 crore to Rs 14.78 crore.

Currently, the second largest producer of cephalosporin, both oral and sterile, Nectar lifesciences is looking at becoming market leaders in the segment and expecting a growth rate of 25 to 30 per cent per annum.

Kaushik said while none of their plants are USFDA approved, the company is looking forward to the approval for upcoming plants.

Nectar is all set to supply advanced intermediate drugs to Ranbaxy Laboratories and hopes to etch its way into US through such contract manufacturing, though "front ending the formulations market is fully ruled out at tghe moment", Kaushik said.