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Orchid Pharma Ltd’s Board of Directors, in compliance with SEBI regulations, has approved a draft scheme of amalgamation with Dhanuka Laboratories Ltd (the promoter of Orchid Pharma). The scheme is subject to approvals from shareholders, creditors, NCLT, BSE, NSE, and other regulatory authorities.
Reports from the Audit Committee, Independent Directors Committee, a Valuation Report, and a Fairness Opinion have been submitted.
“There will be a change in the shareholding pattern of Orchid Pharma pursuant to the scheme, in accordance with the share exchange ratio,” said the company statement.
Following the amalgamation of Dhanuka Laboratories Ltd (DLL) into Orchid Pharma as per the scheme, Orchid Pharma’s post-scheme shareholding will be 74.45 per cent for the promoter and promoter group and 25.55 per cent for the public, compared to the pre-scheme shareholding of 69.84 per cent and 30.16 percent, respectively.
“The shareholding of M/s Dhanuka Laboratories Ltd as of September 30, 2023, was 72.40 per cent,” says the company release. However, on November 28, 2023, DLL sold 13,00,000 equity shares, reducing their shareholding to 69.84 per cent.
Resolution plan
The proposed amalgamation aligns with a resolution plan from May 16, 2019, aiming to create a larger company with a potential sales turnover of ₹1,400–1,500 crore and an EBITDA of ₹200-250 crore.
Chennai-based Orchid Pharma manufactures and exports active pharmaceutical ingredients (APIs) and finished dosage forms, but about 68 per cent of its ₹670-crore revenues comes from three products—Cefixime, Cefuroxime and Ceftriaxone.
The company was started in 1992 by an entrepreneur K Raghavendra Rao, and was acquired by DLL through a Corporate Insolvency Resolution Process in March 2020. Orchid recently raised ₹400 crore through a Qualified Institutional Placement issue.
On the NSE today, the Orchid Pharma share closed at ₹575.60 which was ₹13.75 (2.44 per cent) higher than the previous close.
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