|
| Atlas Group dilutes up to 30% equity in pharma biz |
| Ravi Menon / Bangalore Feb 10, 2010, 18:35 IST |
|
Gwalior-based bicycle manufacturer Atlas Group has roped in a strategic investor for its beleaguered pharma business by diluting equity holdings in the 22-30 per cent range, according to market sources.
The pharma division, Atlas Laboratories and Pharmaceuticals Ltd (ALPL), has been in existence since 2006. "The group was initially looking at exiting the pharma business altogether. But later, it decided on roping in either a joint venture partner or a strategic investor for the business, as looking ahead, it sees the market for generic products rebounding soon," a source familiar with the development said, without revealing the identity of the strategic investor.
ALPL has been focussing on the development and distribution of generic drug products, and currently operates its manufacturing facility out of a excise free zone in Hardwar. "This has enabled them to sell drugs at prices which are 15-25 per cent lower than that of their competitors. However, the net sales of the company have been very low in the last two years and the factory is currently utilising only 10-15 per cent of its total capacity," sources said.
ALPL's manufacturing unit at Hardwar in Uttarakhand produces a wide range of tablets, capsules, dry syrup, liquid orals, balms and ointments, besides low volume parenteral drugs.
An ALPL official confirmed the stake sale, but declined to reveal the identity of the investors, company valuation figures or the share price quoted at the time of sale.
The Rs 700-crore Atlas Group ventured into the pharma industry in 2006. The Hardwar unit was set up at a cost of Rs 70 crore and started commercial production in April 2007. After debuting its products in the Lucknow market, ALPL launched its products in Jammu & Kashmir last year. The company has also been looking to expand its reach to the western states, followed by the southern and eastern parts of the country.
Over the past two years, the company has worked on framing contract manufacturing alliances with various global biopharmaceutical players. These include tie-ups with Cipla, Biochem, VXL and Marion Biotech to develop, manufacture and distribute about 30 different generic drug products.
The Atlas Group, which has diversified business interests in bicycles, steel and e-bikes, is understood to have so far invested close to Rs 200 crore in its pharma division. They added that ALPL's plans to expand into new overseas markets like the EU and the US have been on the backburner for quite sometime because of restrictive laws on generic drugs and other high entry barriers in these geographies.
ALPL is a closely held pharma venture and has not revealed its revenues at any stage, though the company has said that it is targeting a turnover of Rs 500 crore by 2013. And, despite the setbacks encountered with its pharma venture, the Atlas Group is said to be keen on diversifying further into the automobiles and IT space which it views as promising sectors.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
