The Right Formula
Closes on : November 22, 1996
Listing at : Ludhiana, Delhi, Jaipur, Ahmedabad and Mumbai
Lead managers : ICICI Securities and Finance Company, UTI Securities
Exchange
Growing marketing network as well launching of new products offers a good long term buy.
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Morepen Laboratories, the Delhi-based pharmaceutical company is coming out with a rights issue of Rs 78 crore at a premium of Rs 90 to part finance its expansion plans. The company intends to set up a new manufacturing facility at Gurgaon to make Dane Salt, Loratidine and Cisapride. The total cost of the project is Rs 89.50 crore, which will be financed from the proceeds of the current rights issue and a term loan of Rs 11.50 crore from ICICI.
Morepen makes antibiotics and intermediates like ampicillin trihydrate, amoxycillin trihydrate, cloxacillin sodium and 6 APA. It sells these bulk drugs both in the local and global markets. The company has around 20 different products in the ethical and generic formulation markets. Though sales from the formulation market is only 25 per cent of the total sales this figure should risebecaus:
First, the company is continuously increasing its product portfolio which will give it the required depth. And second, Morepen, which currently caters mainly to the northern sector is spreading its wings to the west. Distr-ibutor network and stockists are being identified and the company is also recruiting people at a feverish pace of around 25 employees per quarter. This is definitely going to increase the firm