Sekhsaria Chem plans to go public next fiscal

Mumbai-based Sekhsaria Chemicals Ltd plans an initial public offering (IPO) by the end of next financial year to meet future expansion plans.

The Rs 45 crore company manufactures active pharmaceutical ingredients (APIs) for the export market and mainly caters to the US, Europe, UK, Australia and Japan markets.

The company expects its turnover to increase by more than 100 per cent during the current financial year to touch Rs 100 crore by the end of the current financial year. The company was not willing to disclose the amount it wants to raise from the capital markets.

Speaking to Business Standard, Nandkumar Chodankar, chief executive officer and managing director, Sekhsaria Chemicals, said, "Till now we were funding our needs through internal accruals but we want to foray into bio-technology and also plan to establish a peptide manufacturing unit in the near future, that is why we are mulling to opt for an IPO."

The company is in talks with few European bio-technology companies to explore opportunities of joint research activities.

"Apart from concentrating on bio-technology, we also want to branch out into manufacturing peptides. I have a friend who has a similar unit in the US and we plan to start a similar unit in India by sharing the knowledge required in the next three to four years," he said.

Apart from manufacturing APIs for the export market, the company also works with Ranbaxy and Cipla for their drugs meant for the export market.

The company currently has two plants located in Mumbai with an combined annual production capacity of 500 tonnes and is setting up a third plant in Mumbai with an investment of Rs 100 crore.

"Once the World Trade Organisation-mandated dismantling of trade barriers becomes effective in January 2005, we expect the demand to increase and to meet this requirement we are going in for our third unit," Chodankar said.

The company expects commercial production at the new plant to start by March 2005. "The facility would be manufacturing 20 APIs initially and we expect to add five to six APIs every year. The production capacity of the plant will be more than 500 tonnes per annum," he said.

The company is also looking at improving its research and development facility. "We would be investing around Rs 50 crore in upgrading the R&D facility to meet the new norms," he said.

The company is also looking at inorganic growth as a means of expanding operations and is in talks with a couple of companies based in Maharashtra and Gujarat.

"We are in initial stages of talks with three companies and expect something to come out of it," he said.

According to Chodankar, the company is exploring the possibility of exporting its products to countries in Asia and Africa.

"We are also planning to increase our headcount from the present 350 employees to around 550 once the new facility comes up," Chodankar said.

He said that the company currently has 25 products and another 25 products are in the pipeline.