Ranbaxy to raise $1.5 bn

Management to get flexibility for capitalising on opportunities.

Ranbaxy Laboratories Ltd's board has approved proposals to raise $1.5 billion through a listing in the US and increase the company's authorised share capital from Rs 200 crore to Rs 300 crore.

This has fuelled speculation of a war chest being put together by the company with an eye on big-ticket acquisitions abroad.

But the company is not divulging any details. When the plan to list in the US was announced a week ago, Malvinder Singh, president (pharmaceuticals), Ranbaxy, had said, "This is just an enabling provision. We are a global company. We can use the money whenever we wish to."

The board also approved the company's recent decision to divest of its non-core businesses "� fine chemicals, diagnostics and animal health care "� in favour of ICICI Venture Funds to streamline its business and sharpen focus on pharmaceuticals.

The company has called an extra-ordinary general meeting on October 21 to seek shareholders' approvals.

A Ranbaxy spokesperson said this gave the management the flexibility to capitalise on opportunities as and when they arose.

"We have kept our options open in terms of ADRs (American despository receipts), conversion of GDRs (global despository receipts) into ADRs or FCCBs (foreign currency convertible bonds). We will raise the money as and when needed and in whichever way we find it cheapest," he said.

"We never comment on our targets until we consummate the deal. However, the company stays open to all organic and inorganic growth routes. We just want to raise tonnes and tonnes of money and use it whenever the opportunity comes by," the spokesperson said.

Singh has often said that he is open to viable acquisition prospects and will even look at companies as big as Ranbaxy.