The Hindu Business Line : RPG Life Sciences spins off pharma, investment arms

Mumbai June 12 RPG Life Sciences Ltd (RPGLSL) has decided to spin off its investment and pharmaceutical arms into two separate companies under RPGLSL as the holding company.

The move would not just clean up the pharmaceutical company's balance sheet, it would also help it attract funds to fuel further expansion.

The investments made by Instant Trading and Investment Company Ltd, RPGLSL's wholly owned subsidiary, was having an impact on the pharma business, which required capital to grow, said Mr Arvind Vasudeva, Managing Director of RPGLSL.

With these investments reflecting unfavourably on the balance sheet, it limited the ability to get funds from banks and investors for the pharma business, he told Business Line, explaining the rationale behind streamlining the two businesses.

(In March, the company's auditors had said that they were unable to comment on whether investments made by the company in the investment arm could be realised.)

Board okays proposal

The company's board of directors on Tuesday approved the proposal to spin off the two arms, Mr Vasudeva said, adding that the pharma company would be listed after the requisite legal and regulatory approvals are obtained.

The pharmaceutical business would look to raise funds to support its research, besides beefing up its manufacturing facilities to meet global regulatory requirements, he said.

Research focus

The company's research focus is in the fermentation and life sciences segments, in therapeutic areas such as oncology and immuno-suppressants.

This fits into RPGLSL's growth plan to take its drugs into the European and US markets, he said.

The company plans to file 4-6 drug master files in Europe and a similar strategy will be adopted in the US as well, he added.

About a third of the company's Rs 124-crore revenue comes from exports.

The company has five manufacturing plants in the country, two active pharmaceutical ingredient plants at Thane, two formulation facilities and a fermentation plant at Ankleshwar. It also has a research site at Thane.

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