IFCI Venture Capital is selling over half of the shares it owns in Ahmedabad-based pharmaceutical company Marck Biosciences Ltd. The company intends to use the money to part fund a proposed sterile manufacturing facility for large volume parenteral line at the land adjacent to the existing factory premises.
IFCI Venture Capital had invested Rs 17.5 crore two years ago through Indian Automotive Component Manufacturers Private Equity Fund - Domestic. It holds 13.77% as of now that will get diluted to 4.32% post issue. The investor also put in Rs 2.5 crore through optionally convertible debentures that is convertible into shares based on the covenants between the company and IFCI Venture Capital.
The merchant bankers to the issue have indicated that the investor may get an additional 5.5 lakh shares that will get IFCI Venture Capital an additional 1.51% pre issue and 1.19% post issue.
Although the company has not said how much it intends to raise but the proposed factory will cost it Rs 55 crore, part of which is to be financed from internal accruals. A substantial chunk (over two thirds) of this is to be funded from the IPO proceeds just to ensure IFCI Venture Capital does not sit on a loss as it had subscribed the shares at a price of Rs 35 each.
Marck is into formulation & development, manufacturing and marketing. It manufactures and markets both therapeutic (Fluid Therapy, Injections, Eye Care and Respiratory Care) and non therapeutic products (medical devices such as, Lens cleaning solutions, Eye & Wound Irrigation, Eyewash Solution and First aid Solution).
Exports comprise just about a third of total revenues for the company that closed last fiscal ended March’10 with total sales of Rs 88 crore with net profit of Rs 2.7 crore. Marck Biosciences is promoted by Patel family led by Bhavesh Patel. The promoters own 66.18% as of now that will get diluted to 51.89% post issue.