Claris to set up 6th plant at Bavla campus

The Ahmedabad based pure-play injectables company Claris Lifesciences Ltd, that is hitting the capital markets tomorrow with an initial public offering, plans to invest Rs 131 crore on setting up a sixth plant at its 78 acre Bavla campus and around Rs 39 crore on research and development.

The company plans to raise Rs 300 crore from the IPO. Of this around Rs 46 crore would go to prepay a term loan. The company currently has a debt of Rs 350 crore, and a debt-equity ratio of 0.6 that will come down to 0.5 post IPO. Also,there would be 16.7 per cent dilution of promoters' stake in the company post IPO. Claris currently has five plants at its Bavla campus near Ahmedabad, of which four are operational. "The fifth plant that will manufacture finished formulations will become operational within next year", informed Arjun Handa, managing director and CEO of Claris Lifesciences. The sixth plant will manufacture propofol, one of the company's key products used as an anaesthetic agent, that accounts for 14.84 per cent of its total sales. This would more than double Claris' propofol manufacturing capacity, sources close to the development said. Meanwhile, US based private equity firm Carlyle that had invested $20 million in Claris in 2006 to pick up a 14 per cent stake, is not using the IPO as an exit route. Shankar Naraynan, managing director, Carlyle India Advisors Pvt Ltd said,"We have not decided as to when we would like to exit. For the timebeing we stay put in Claris".

The company has posted a total sales of Rs 324.95 crore and a net profit of Rs 57.72 crore during the first five months ended on May 31 this year.