Zydus Cadila to tap market

By Our Staff Correspondent

MUMBAI, FEB. 7. Zydus Group's Cadila Healthcare is entering the capital market with a public issue of 14.88 million equity shares of Rs. 5 each. The issue is being done through the book building route. The book building portion (90 per cent of the issue, that is, 13.39 million shares) will open for bidding on February 9 and will close on February 16. The fixed price portion (FPP) of 14.88 lakh shares (10 per cent of the issue) would then follow. The indicative price band is Rs. 300-350 per share.

Zydus Cadila plans to use the funds for financing its new formulations unit at Moraiya Nagar (Near Ahmedabad), research and development centre and for expansion of its bulk drugs unit at Ankleshwar (Gujarat). The company also intends to use part of the proceeds for financing acquisitions and joint ventures and repaying debts. The equity shares are proposed to be listed on the Ahmedabad, Mumbai and National stock exchanges. JM Morgan Stanley, Kotak Mahindra Capital Company and DSP Merrill Lynch are the book running lead managers and ICICI Securities & Finance Company is the lead manager.

The company, as per ORG November 1999 MAT, claims to be the sixth largest pharmaceutical company in India. Since the restructuring of operations in 1995, the company has been growing at a CAGR (compounded annual growth rate) of about 17.85 per cent in its turnover and over 90 per cent in its bottomline. The company's sales in 1998-99 were Rs. 361 crores with a profit of more than Rs. 30 crores. Zydus Cadila is expected to post a sales turnover of about Rs. 474 crores in 1999-2000.

A leading player in the formulations market, the company also has a strong presence in bulk drugs, diagnostics and OTC products. The pharmaceutical business contributes over 95 per cent of the turnover. It has identified anti-infectives, gastro-intestinals, cardiovasculars, pain management and biologicals and vaccines as its focus therapeutic segments.

As part of its growth strategy, Zydus Cadila plans to focus on discovery and enter the highly regulated markets in the developed countries. It also plans to take its domestic strengths to the international market.

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