Indian drugmaker Cipla said its subsidiary in Uganda, Cipla Quality Chemical Industries Ltd, plans to float an initial public offering and has hired an investment bank for the process.
CiplaQCIL has appointed Renaissance Capital (Kenya) Ltd as the official book runner, Cipla said in a stock market disclosure on Friday.
Cipla Group intends to continue holding a majority stake and control in CiplaQCIL, the company said. Cipla held 62.30% of the Ugandan subsidiary, according to its annual report for 2015-16.
However, certain shareholders may consider selling some or all their stake to enable sufficient free float and liquidity, it added without identifying any shareholders.
CiplaQCIL was founded in 2005 as a joint venture between Cipla, Ugandan pharmaceuticals firm Quality Chemicals Ltd and the government of Uganda to set up a pharmaceutical plant.
The subsidiary has a facility in Kampala, Uganda, focused on the production of anti-malarials, anti-retrovirals and Hepatitis B drugs for the Sub-Saharan African region.
CiplaQCIL had profit after tax of about Rs 1.56 crore on revenue of almost Rs 6 crore in 2015-16, as per Cipla's annual report. That’s a fraction of the company’s consolidated profit of Rs 1,506 crore on revenue of Rs 14,067 crore.
Earlier this week, Cipla reported a 35% fall in net profit to Rs 335 crore for the July-September quarter primarily due to lower sales in emerging markets and Europe. Total revenue rose 8.6% to Rs 3,672 crore.
Cipla is a major pharmaceutical company in South Africa with a private market share of more than 5%, the annual report said. South Africa contributed 11.5% to the company's overall revenue on a consolidated basis, it added.
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