Mid-sized pharmaceutical firm Shasun Pharmaceuticals Ltd is looking to sell its unit situated at JN Pharma City in Visakhapatnam in Andhra Pradesh to a prospective JV partner and has received approval from the company's board for the same, a statement said.
"The board of directors at its meeting held on December 12, 2013, decided to sell/transfer the company's unit situated at JN Pharma City, Vizag to a joint venture or any other person in any manner as the board may consider appropriate subject to the approval of the shareholders," Chennai-based Shasun Pharma informed the Bombay Stock Exchange in the statement.
The Visakhapatnam unit is an API (active pharmaceutical ingredient) manufacturing facility, which was built at a cost of about Rs 130 crore. The company had acquired the land in early 2007, but construction for building the facility was started last year only.
Shares of Shasun Pharma closed at Rs 76.75, down by 2.04 per cent at close of trade on Friday, giving the company a market capitalization of Rs 434.41 crore.
Life sciences focused private equity firm OrbiMed holds 11.62 per cent stake in Shasun Pharma while value investor Shivanand Shankar Mankekar holds 3.71 per cent.
Last month, media reports said that Shasun Pharma is planning to invest Rs 200 crore in the current fiscal to augment the production capacity at its manufacturing units in India and the UK. Of this investment, nearly 80 per cent is planned to be spent towards increasing capacity in API and remaining 20 per cent in formulations.
Earlier in July, Shasun Pharma and SeQuent Scientific Ltd signed a letter of intent to form a joint venture firm, of which 73 per cent would be owned by SeQuent and 27 per cent by Shasun, to develop, manufacture and sell veterinary products, including both API and formulations in the global market.
API plays a key role in whole pharmaceutical industry as it forms the most vital part of every formulated end product. In 2010, the overall
API market was valued at $101.08 billion and is expected to grow at a CAGR of 7.9 per cent from 2011 to 2016.
(Edited by Joby Puthuparampil Johnson)