Shares of Aurobindo Pharma rose 5 per cent to Rs 966 in intra-day trade on the BSE on Monday, thus gaining 7 per cent in the past two trading days, on report that the government has given the company approval under the Production Linked Incentive (PLI) scheme for promotion of domestic manufacturing of critical bulk drugs. The PLI scheme aims at promotion of manufacturing of critical key starting materials (KSMs)/drug intermediates and APIs in the country.
According to a report by Press Trust of India, Aurobindo Pharma (through Lyfius Pharma) received government approval for setting up plants for production of Penicillin-G and 7-ACA, with committed production capacity of 15,000 MT and 2,000 MT, respectively under the PLI scheme.
The committed investment for Penicillin G is Rs 1,392 crore, and for 7-ACA is Rs 813 crore. Aurobindo (through Qule Pharma) has also received approval for setting up plant for Erythromycin Thiocyanate (TIOC), with committed production capacity of 1,600 MT at a committed investment of Rs 834 crore, the report suggest. CLICK HERE TO READ FULL REPORT
The commercial production is projected to commence from the financial year 2023-24 (FY24). In addition to the government incentives for the fermentation products, it will enhance the company's backward integration in antibiotics and open-up new revenue streams to support the company's growth prospects in the future, ICICI Securities said in a note.
At 10:23 am, Aurobindo Pharma was trading 4 per cent higher at Rs 957 on the BSE, against 0.21 per cent gain in the S&P BSE Sensex. The counter has seen huge trading volumes with a combined 2.9 million equity shares changing hands on the BSE and NSE, till the filing of this report. The stock hit a record high of Rs 997 on January 5.