Strides Arcolab, the Bangalore-headquartered Rs 1,800 crore publicly-held mid-size pharmaceutical company, has raised $100 million (Rs 450 crore) through a qualified institutional placement (QIP) issue.
“We have successfully raised $100 million through the QIP route, which will be used to part-repay the debt incurred for our recent acquisitions,” TS Rangan, group chief financial officer of Strides Arcolab, said.
The drug firm had fixed the floor price of the issue at Rs 423.55 and mandated Daiwa Capital Markets, IDFC, Kotak Mahindra Capital and RBS Equities as the lead managers. Qualified institutional placement is a route, which many Indian companies are tapping into as it’s a relatively quick process of raising money through a private placement of shares or convertible securities with institutional buyers.
However, he declined to comment on the dilution of stake after the QIP.
Strides Arcolab, in the recent past, has been pretty active in the acquisitions scenario. This March, Strides bought half the equity in Aspen Pharmaceuticals, a South African generics’ drugmaker, for $117 million (Rs 530 crore). It also acquired Aspen’s unit in Brazil for $75 million, taking the acquisition costs to $192 million (nearly Rs 900 crore). It is understood that $67 million (Rs 300 crore) has already been paid and another $25 million (Rs 112 crore) is expected to be paid by the end of this calendar year.
More than half of this initial payout is understood to have been funded from the receipt of licensing fee and internal accruals from a major outsourcing deal it signed with Pfizer during late 2009. According to market information, Strides has time till the end of 2011 to pay the remaining amount.
Industry experts are of the opinion that present fund raising along with milestone payment from Pfizer deal will suffice to cover the recent acquisition costs of the company.
