Drug maker Lupin is likely to scout for overseas acquisitions to boost sales, especially in Europe, Russia and Turkey, following board approval to raise Rs 7,500 crore through the issue of securities. The market buzz sent the company’s shares up 2.3% intra-day on the Bombay Stock Exchange on Wednesday, before ending at Rs 1,806, up 1.8%.
The Lupin board on Tuesday approved a plan to raise Rs 7,500 crore through various equity and quasi-equity instruments. This will have to be approved by shareholders at the company’s annual general meeting next month.
“The board has approved in principle, the raising of funds up to Rs 7,500 crore through issue of securities such as equity shares, global depository receipts (GDRs), American depository receipts (ADRs), convertible bonds, equity-linked instruments, as may be appropriate,” Lupin said in a statement, without elaborating on the use of the money to be raised.
Ranked as one of India’s top five drug makers by sales, Lupin is reportedly keen to acquire Belgium’s UCB SA’s generic drugs business to boost sales, and has already indicated its intention to grow through the inorganic route.
“Lupin continues to lookout for meaningful acquisitions that would enable the company to build and consolidate its position as an emerging global specialty pharmaceutical powerhouse,” a company spokesperson said.
“Geographically speaking, we are keen on expanding our presence in Europe, Russia, Turkey, while we continue to extend our presence in other geographies such as the US, Latin America, Japan, India and South Africa. Also, we continue to be on the lookout for meaningful targets in the inhalation, complex injectables and derma space globally,” he added.
Over the past two years, Lupin has been on an acquisition spree, which has given it access to niche-research competencies and product pipelines. It bought into Nanomi BV of Netherlands in February 2014, and acquired assets to enter new markets, including Laboratorios Grin, a leading ophthalmic player in Mexico in March, 2014, and Medquimica Industria Farmaceutica in Brazil in May 2015.
Back-ended growth from R&D investments in complex technology and regulatory delays for key products were some of the risks that may have been overlooked, according to SBICap Securities analyst Vivek Kumar.