Gland Pharma to raise $25m, eyes public issue

SMOKE SIGNALS

Gland Pharma, a city based liquid injectibles manufacturing company, is planning to raise $25 million to meet its fund requirements for manufacturing capacity expansion, marketing support and a foray into regulated markets.

The company is evaluating various options, including an initial public offering (IPO), private placement of equity and going for fresh debt from the institutions to raise the funds.

"We will take a decision on the IPO with in the next two months. Our debt equity ratio at 0.8:1 also makes us comfortable to go for a higher gearing," PVN Raju, chairman of Gland Pharma said at a press conference here. The company presently has a paid-up capital of Rs 9.68 crore.

Gland Pharma today announced that it has received the US Food and Drug Administration (FDA) approval for its injectibles facility at Dundigal near the city.

The approval was obtained for some of the products that the company will manufacture for Apotex Corporation, a US based pharmaceutical major.

The company has posted a net profit of Rs 5 crore on a turnover of Rs 50 crore last fiscal.

The company expects to clock a Rs 65 crore turnover this year.

Contract manufacturing contributed Rs 10 crore to last year's turnover of Rs 50 crore, while exports contributed another Rs 8 crore.

The balance came from domestic sales of injectibles, YVG Krishna Rao, general manager (corporate finance) of the company said.

In the current year, we are expecting an exports volume of $5 million and targeting much bigger export volumes in the ensuing years, Krishna Rao said.

Our foray into the regulated markets will fetch us 20 to 25 times the current price realisations in exports, Srinivas Sadu, vice president (exports) said while justifying the company's projections on export revenues.

The company has pioneered Heparin technology in the country and set up its manufacturing facility in collaboration with Vetter group of Germany. It has a leadership position in the GlycosAminoGlycans (GAGS) range of molecules.

The company manufactures active pharmaceutical ingredients (APIs) and injectible formulations for niche segments such as Osteoarthritis, anti-coagulents, gynaecology and opthalmology.

Promoters of the company currently hold about 60 per cent stake in the equity, while Vettor group holds 16 per cent stake.