Mumbai-based Elder Pharmaceuticals is in talks with group of private equity (PE) firms to raise Rs 125-150 crore for retiring part of its debt, partly finance an ongoing fresh manufacturing facility besides drug research.
Elder Pharma has appointed ICICI Securities as the investment banker that has shortlisted ICICI Venture and Motilal Oswal Private Equity Advisors, among others, for the proposed transaction, as per this ET report.
To raise around Rs 125-150 crore, the company would need to dilute about 14% stake(short of the 15% mark which triggers a mandatory open offer) through issue of new shares. This could entail a pricing of about 40-60% premium over the current price on the stock exchange.
Promoters Anil Saxena and his family held around 39% stake in the Rs 600-crore company as of June 30, which will come down to 35% after the private placement. The company will also issue warrants to the promoters, so that they can later hike their stake to about 40% level.
This comes after a failed attempt to raise a similar amount in 2008. At that time Elder Pharma had dropped plans to raise about $30 million through an issue of foreign currency convertible bonds (FCCB).
Elder Pharma has three manufacturing facilities in Maharashtra at Nerul, Pawane and Patalganga. The company claims market leadership in three therapeutic segments — women’s healthcare, wound care and nutraceuticals. Its popular brands include Shelcal calcium supplement, Eldervit vitamin injection and Chymoral Forte pain reliever.