Strides Arcolab plans to approach Foreign Investment Promotion Board (FIPB) after the government rejected its proposal to issue shares to non-resident and resident equity shareholders of Shasun Pharmaceuticals.
"The company is proposing to make a representation to FIPB," Strides Arcolab said in a BSE filing.
Strides Arcolab said it has been informed by the FIPB that the company's application has not been okayed on the grounds that the Scheme of Amalgamation is yet to be approved by the competent High Courts in India.
In September last year, the drug firm had announced merger of Chennai-based Shasun Pharmaceuticals with itself that would have created an entity among the top 15 listed domestic drug makers with a turnover of over Rs 2,500 crore.
As per the plan, Shasun was to amalgamate with Strides in an all-stock transaction. Shareholders of Shashun were slated to receive 5 equity shares of Strides for every 16 shares held by them in Shasun and based on the exchange ratio, Shasun shareholders were to own 26 per cent of the combined entity.
Earlier this week, government approved proposals for foreign direct investment amounting to around Rs 4,000 crore by four pharma and medical devices firms, including Torrent Pharmaceuticals and Biocon's research services arm Syngene.
Ahmedabad-based Torrent Pharmaceuticals' Rs 3,000 crore proposal for increasing FII investment limit to 35 per cent from 13.09 per cent was approved by the government.
Similarly, Syngene International's proposal to raise FDI of around Rs 930 crore by raising the foreign investment to 44 per cent from the approved percentage of 10 per cent was also okayed.
Shares of Strides Arcolab were trading at Rs 1,172.55 per scrip on BSE post afternoon trade, up 0.36 per cent share from their previous close.
