Piramals buy out Sarabhais from JV for Rs 69 crore

The Ajay Piramal-controlled Nicholas Piramal India Ltd said it had bought Ambalal Sarabhai Enterprises' stake in their 50:50 joint venture, Sarabhai Piramal Pharmaceuticals, for Rs 69.3 crore.

The acquisition will catapult Nicholas Piramal to the fourth position in the domestic pharmaceuticals market with a market share of 4.4 per cent, against 3.4 per cent now.

According to Nicholas Piramal, its field force will now increase from 2,010 to 2,805, making it the leader in domestic market reach.

"The buyout is in line with Nicholas Piramal's objective of consolidating its pharmaceuticals portfolio," Nicholas Piramal Chairman Ajay Piramal said in a media release.

The Nicholas Piramal stock opened at Rs 810 on the Bombay Stock Exchange today and closed at Rs 827.8 after touching the day's high of Rs 830.

The acquisition would also enable Nicholas Piramal to enhance its position in therapeutic segments, the company release said.

The company reported a sales turnover of Rs 180 crore and a profit after tax of Rs 17.65 crore for 2002-03.

The company has 12 brands with sales of over Rs 5 crore, which form over 60 per cent of its sales.

Of these, five brands have sales of over Rs 10 crore. Sarabhai Piramal's leading brands include Pentids, Esgipyrin, Tossex, Mazetol, Resteclin and Suganril.

Nicholas Piramal has invested Rs 22.5 crore in the joint venture, and received dividends aggregating Rs 24 crore till 2002-03.

Profits for the current financial year will accrue only to Nicholas Piramal. Sarabhai Piramal started operations in 1999 with sales of Rs 58.75 crore.

Nicholas Piramal is the flagship company of the Rs 3,500 crore Piramal Enterprises. The group also houses other businesses, including retailing, textiles, automobile components and engineering.