Academician and value investor Shivanand Mankekar and his son Kedar have invested Rs 52.25 crore ($8.4 million) in fine chemicals and drug ingredients maker SeQuent Scientific Ltd through a preferential allotment.
The preferential issue was approved by the shareholders last month along with a fresh equity convertible warrant issue to the promoter group. Arun Kumar-led group, which is also the promoter of Strides Arcolab, already held unconverted securities.
Assuming full conversion of all the outstanding securities, Mankekars would own around 4.86 per cent stake while the promoter holding will be 72 per cent. The current promoter holding in the firm is 69 per cent.
Mankekars already owned 2.39 per cent in SeQuent Scientific prior to this allotment. They also own just under 5 per cent in Strides Arcolab. The Mankekars typically invest directly through open market transactions rather than preferential issues.
The allotment comes just ahead of the planned issue of fresh securities by SeQuent Scientific to raise up to Rs 400 crore. The issue is expected to hit the market next month after FIPB gave its nod recently to the issue, which would involve foreign investors pitching in with more money.
SeQuent, which is estimated to have ended FY15 with revenue of Rs 450-500 crore (it is yet to announce its results), has been active over the past year making key strategic moves, including acquiring a majority control in animal health company in Turkey.
Back home, it completed the buyout of Shasun Pharma's stake in their veterinary products JV Alivira Animal Health. Alivira also counts Ascent Capital as an investor.
This comes even as the promoter's flagship company Strides Arcolab is acquiring Shasun Pharma in an all-stock deal.
These moves by SeQuent Scientific come at a time when the animal health industry is growing at a fast clip, predominantly driven by rising worries of multiple diseases, increased investment from government as well as non-government agencies and the growing demand for animal protein and animal based food, especially in the emerging markets.
In addition to the animal active pharmaceutical ingredients (API) business, SeQuent Scientific has a niche human API business and recently entered into a strategic pact with Gilead Sciences for a Hepatitis C drug.
(Edited by Joby Puthuparampil Johnson)