NecLife plans Rs 230 crore FCCB float

The Chandigarh-based Nectar Lifesciences (NecLife) plans to raise about Rs 230 crore ($50 million) through foreign currency convertible bonds (FCCBs) to finance capacity expansion.

The company is setting up a manufacturing facility in Punjab to get into non-antibiotic active pharmaceutical ingredient segment. A company source said the expansion also involved adding capacity in existing production lines.

The new facility, expected to come up in the vicinity of its current unit at Derabassi in Punjab, would be dedicated to new line of speciality products.

With this diversification, Nectar plans to focus on a portfolio of non-antibiotics that comprises cardiovasculars (statins and prils) and anti-histamines (fexofenadine).

Vivek Kaushik, president, said the FCCB plan would be finalised in a week. Once the final decision on the size and the time of the FCCB is taken, the company would inform the concerned authorities. He, however, confirmed that the FCCB would be within the $40-$50 million range.

The company had floated its initial public offer (IPO) in June this year to fund the construction of a formulations facility at Baddi in Himachal Pradesh, and set up a sterile cephalosporin unit and a research and development (R&D) centre.

NecLife, a leading manufacturer and exporter of antibiotics bulk such as cephalosporins and semi-synthetic penicillins, is also active in R&D.

The company, which was formerly a joint venture with Punjab State Industrial Development Corporation for the manufacture of oral and sterile range of active pharmaceutical ingredients (APIs) and formulations, had developed technologies for2nd, 3rd and 4th generation cephalosporins.

At present, the growth impetus for the company is from the domestic as well as global markets. A Rs 230 crore bulk drug company with a presence in the anti-infective therapeutic category, NecLife's expansion would help the company to enter the non-antibiotic active pharmaceutical ingredients segment.

Nectar also has a wholly owned subsidiary, Chempharma, which is based in Sri Lanka. This unit, which manufactures API intermediates is almost dedicated to captive consumption by Nectar.