TPL to raise Rs 250 crore for expansion, acquisition

AHMEDABAD: The Rs 480 crore turnover Ahmedabad-based Torrent Pharmaceuticals Ltd is planning to raise around Rs 250 crore through a mix of debt and equity (66:34).
The exercises being carried out to mainly raise funds for the expansion of its R&D and manufacturing facilities as well as the acquisition of a German company, for which Torrent is in advance stages of negotiations.
A zero debt company, TPL already has reserves of Rs 254.92 crore. While around Rs 165 crore is expected to be raised through the debt route from banks, the company plans to raise the remaining amount through equity, the sources said.
For the equity component, the company is mulling a combination of private placement with private banks as well as public offer route, the sources said.
The promoters too may opt for increasing their stake in the company, which currently has a paid up equity capital base of Rs 21.16 crore, the sources added.
The Mehta family currently holds 74.07 per cent in TPL, while financial institutions hold 12.86 per cent and the Indian public has a 9.69 per cent stake.
TPL is talking to banks and financial institutions to raise the debt component of the exercise. The funds will be raised in trenches over the next couple of years.
Torrent Pharma is in the midst of a major business expansion drive that includes expanding existing manufacturing facilities, setting up new facilities at Baddi at Himachal Pradesh and enhancing existing R&D capabilities.
While TPL is putting up a new formulations manufacturing facility at Baddi to cater to the domestic market at a cost of Rs 128 crore, it is planning an expansion-cum-upgradation of its active pharmaceutical ingredients (API) facility at Indrad near Ahmedabad at a cost of Rs 24 crore to meet with USFDA standards.
The Baddi facility, expected to be operative from 2005-06, is entitled to 10-years of exemption from excise duty & income tax.
The Indrad facility, comprising both API and formulations with dosage forms like tablets, capsules and injectibles, has already been approved by EU authorities and is now preparing for USFDA approval.
To boost R&D capability in terms of product development and discovery research strengths, the company is planning an investment of Rs 100 crore over the next 18 months at TRC, which was established at a cost of US$ 20 million in 1996 at Bhat near Gandhinagar.
The R&D ramp up would involve increasing the physical infrastructure and research facilities at TRC as well as augmenting scientific manpower. Currently, TPL employs more than 400 scientists.
The company has recently out-licensed its patented AGE breaker molecule to Swiss pharma giant Novartis.