The Max India group is planning to raise Rs 125 crore to fund its forays in telecom, paging services, pharmaceuticals, satellite communication and speciality metals.
The groups chief executive, Analjit Singh, said the funds would be raised by the end of the year. However, the final decision to go in for either global depository receipts or tap the domestic market is yet to be taken, Singh added.
He also said the group was reorganising its pharmaceutical business to concentrate more on bulk drugs rather than formulations.
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The new patents regime demands huge expenditure on marketing. We are talking in terms of crores of rupees for each product. We feel these funds could be better utilised elsewhere, Singh said. It was for this reason that some of the groups popular formulation brands including Cefamax, Clauvnate, Maxmox and Megamox had been sold to the multinational, Rhone-Poulenc.
Singh said the future of formulations would be in developing unique molecules, and me-too products would not succeed in the market This required huge investments in research and development besides heavy marketing cost.
With the groups forays in the telecom sector beginning to yield results, Singh said that they were now targetting a turnover of Rs. 2000 crore by 2000 AD.
Hutchmax, the cellular licencee for Mumbai, Comsatmax, a very small aperture terminal (V-SAT) company, and Maxpage, a paging services operator, had all been started within the last one to two years by the group. Singh felt that these business divisions needed more attention from the management
The Max group was expecting 60 per cent profits from the telecom ventures and 40 per cent from the pharmaceuticals business in the coming years.
Hutchmax, the groups cellular company, had notched up over 70,000 subscribers in its first year of operation in Mumbai This amounted to over 60 per cent of the market, and the growth projections were excellent, Singh added.
However, the V-SAT business was growing slowly. Though V-SAT was the most cost-effective manner of communication, its use had not spread due to lack of awareness, Singh asserted.
The reduction in import duties for V-SATs, as announced in the 1997-98 budget, should help push up the market, he added.
Singh said the group had no plans of forming any new joint ventures in the near future as the focus now was on consolidating its new lines of business in the telecom sector.