The Hindu Business Line : Nectar Lifesciences plans Rs 100-cr IPO

NECTAR Lifesciences Ltd, the Chandigarh-based manufacturer of cephalosporin (antibiotic used to treat bacterial infections) and semi-synthetic penicillin, is planning to raise about Rs 100 crore through an initial public offering for its expansion plans.

The funds will mainly be used for strengthening the company's presence in the cephalosporin segment as well as entering the non-antibiotic segment. It is planning to set up a sterile cephalosporin US FDA-approvable plant, along with putting in place a formulations facility at Baddi in Himachal Pradesh. A part of the money will also be used in funding its research and development (R&D) and setting up a quality control centre at DeraBassi (Punjab). Nectar Lifesciences currently has facilities to manufacture both oral and sterile bulk drugs and supplies to several domestic pharmaceutical companies. The company is also focusing on the development of more value-added cephalosporin products.

According to Mr Sanjiv Goyal, Managing Director, "The strength of the company is in the range of products, which is expanding each year. The R&D team is working on developing new molecules, improving the existing ones and bringing in cost efficiencies."

The company proposes to make a fresh issue of 38.7 lakh shares of Rs 10 each through the initial public offering. The offer will constitute 26 per cent of the fully diluted post-offer paid-up capital.

The revenues of the company have been growing at about 15 per cent in the last five years. For the year ended March 31, 2005, it achieved a sales turnover of Rs 232.7 crore with a net profit of Rs 22.6 crore.

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