Lupin may raise up to $1.17B to prepare for acquisitions

Desh Bandhu Gupta-led drugmaker Lupin Ltd has obtained in-principle nod from its board for raising funds of up to Rs 7,500 crore (nearly $1.17 billion) through issue of equity shares or other equity linked instruments, it said on Tuesday.

The drugmaker did not disclose the purpose of raising the funding. However, the firm has been looking at some big-ticket acquisitions and the proposed fundraising activity is expected to create a war chest for the purpose.

The Mumbai-based company will now seek approvals from its shareholders in an Annual General Meeting to be held on July 23, 2015, it said.

Lupin, the second-biggest Indian pharmaceutical company by market cap behind Sun Pharma and the third-biggest by revenue, had been pursuing inorganic expansion during 2007-11, but had gone quiet on the M&A front since then.

Early last year, it revived its M&A-led growth strategy as it acquired Laboratorios Grin S.A. De C.V, which marked the company's foray into the high growth Mexican and the larger Latin American pharmaceuticals market.

It also acquired Dutch firm Nanomi B.V which enables it to manufacture complex injectables with innovative drug delivery systems.

Post these two deals, it roped in Theresa Stevens as chief corporate development officer from Aptalis for its global operations. Theresa is now responsible for global mergers and acquisitions (M&As) and specialty business strategy.

It struck two more deals recently.

In March, it acquired the balance 40 per cent equity stake in South African generic drugmaker Pharma Dynamics (PD) from its founders to make it a wholly owned unit. It had picked 60 per cent stake in the firm in 2008.

Last month, it acquired Brazil-based Medquímica Indústria Farmacêutica S.A., (Medquímica) which marked its foray into the Brazilian market.

Last year, the company's chief executive Vinita Gupta had told news agency Bloomberg that the firm is on the look-out for deals starting from $50 million and up to $1 billion.

For the financial year ended March 31, 2015, the company recorded a consolidated turnover of Rs 12,599.7 crore ($1.96 billion) and a net profit of Rs 2,403.2 crore ($375.3 million).

Lupin’s shares were trading at Rs 1798.35 each, up 1.45 per cent on the BSE at 11:25 AM, in a strong Mumbai market on Wednesday.

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