Mumbai: International Finance Corp. (IFC), the private sector lending arm of the World Bank, on Thursday said it was looking to invest up to $75 million, or about Rs.500 crore, in Glenmark Pharmaceuticals Ltd, which is raising $200 million to reduce debt and fund expansion plans.
The Mumbai-based drugmaker is raising the capital by selling quasi-equity instruments. The company plans to use the money to expand manufacturing capacity, mostly in India, build research and development (R&D) capacity for new products and reduce debt.
Of the total, Glenmark plans to invest a significant amount in capital expenditure over the next three years across its facilities in India, IFC said in the disclosure.
“Having IFC as an anchor investor in this round of fund-raise will also help attract other investors—which is important during a time of volatile markets… The company also values IFC’s ability to fund future rounds as the company implements its growth plans and strategy,” IFC said.
A spokesperson for Glenmark said the firm planned to release a statement on the development. No statement had been released as of press time.
“Glenmark has been facing pricing pressure across its key markets. The fund raise will help in deleveraging the balance sheet, thereby improving profitability along with expanding capacity at its plants,” said an analyst at a Mumbai-based securities house who did not want to be named.
As of 31 March, Glenmark’s debt stood at around Rs.4,000 crore, with a debt-equity ratio of 0.6. For year ended 31 March, Glenmark posted a net profit of Rs.702 crore onRs.7,649.6 crore of revenue.
The company has a pipeline of seven molecules—two new chemical entities (NCEs) and five new biological entities (NBEs)—either in clinical trials or ready to enter clinical trials.
Glenmark has 17 manufacturing facilities across the world, of which 13 are in India.
The majority of them are in small towns and cities, including in Indore (Madhya Pradesh) and Ranipool (Sikkim).
The company offers products across a range of therapies including dermatology, diabetes, oncology and cardiovascular disorders.
It is also looking to launch several products in India and other emerging markets over the next three years.
Glenmark is controlled by the Saldanha family, which held a 46.48% stake in the company as of 31 March.
The remaining stake is held by public shareholders.
Singapore’s state-run investment arm Temasek Holdings Pte. Ltd invested around Rs.945 crore ($151 million then) for a 3.83% stake in Glenmark in April last year.
Viswanath Pilla contributed to this story.
Source: Mint