The International Finance Corporation (IFC), the private-sector investment arm of the World Bank, has proposed to provide a loan of up to $30 million (Rs 224 crore) to Hyderabad-based vaccine manufacturer Biological E Ltd.
In a disclosure, IFC said the proposed loan – an ‘A’ loan – will help Biological E expand its vaccine manufacturing facilities, with the company also looking to take part in the development and availability of a potential inoculation for the novel coronavirus.
The expansion will take place at the company’s facilities in the Shameerpet region outside of Hyderabad.
This proposed loan will help in increasing the availability of affordable vaccines for people in India.
Biological E also supplies its products to other developing and middle-income countries both directly and through supplies to global organisations such as UNICEF and the Global Alliance for Vaccines and Immunizations (GAVI).
“The company invests significantly in research and development which is key to building a pipeline of products for under-met medical needs. It plans to launch several new products in India and other developing countries over the next five years,” IFC said in its disclosure.
This will not be the first time that the Washington-headquartered IFC has proposed an investment in Biological E. In May 2017, the institution said it was looking to invest up to $60 million (around Rs 387 crore) in the Hyderabad-based company through a combination of debt financing and subscription to non-convertible debentures (NCDs).
Biological E Ltd was set up in 1953. It is promoted by managing director and chief executive officer Mahima Datla, who holds a majority of its shares. The remaining stake is held by members of her family, according to IFC.
The company reported consolidated net sales of Rs 980.79 crore for the financial year ended March 2019, with profit-after-tax figures of Rs 89.18 crore for the same period.
IFC’s activities in India
The proposed loan to Biological E is the latest move by IFC in India. Apart from its direct investments that involve both equity and debt funding, the institution also actively invests in private equity and venture funds.
Last month, it disclosed that it was looking to invest up to $35 million (around Rs 263 crore) in paper manufacturer JK Paper Ltd by subscribing to NCDs of the Singhania Group company. In 2018, IFC had invested $45 million in the form of NCDs in JK Paper.
In May, IFC proposed to make a debt investment of up to $100 million (around Rs 756 crore) to NBFC firm Fullerton India Credit Company Ltd (FICCL), which is owned by Singapore state investment firm Temasek.
Prior to that, in March, it offered up to $54 million (around Rs 397 crore) in debt-to-poultry company Suguna Group.