India : IFC to invest $75 m in Glenmark

The International Finance Corporation, may decide to assist Glenmark Pharmaceuticals Limited in its efforts to raise $ 200million by lending it $75 million. Glenmark plans to raise the money through market issue of quasi-equity instruments. The IFC is the private lending arm of the world bank

Glenmark pharmaceuticals Limited intends to grow its pharmaceutical manufacturing facilities, most of which will be in India, and ramp up its research and development centres for testing new molecules, through this fund.The money raised will also help the company reduce debt so that a higher percentage of internal accruals can be deployed more for R&D.

Offering products across a range of therapies including respiratory, dermatology, cardiovascular, diabetes and oncology Glenmark at present runs 17 manufacturing facilities; thirteen of these are in India. Saldanha family, the promoters of publicly listed Glenmark, hold 46.48 per cent in the company and public shareholders hold the remaining, As of March 31, 2016. IFC’s investment will help Glenmark expand domestic manufacturing under the government’s ‘Make in India’ program reports Deal street Asia.

Last year in March, Singapore’s Temasek Holdings invested $151 million for a 3.83 per cent stake. 2015 saw Glenmark sales fall in emerging markets-excluding India, which earlier contributed about a quarter of total sales and have been drivers of margin growth.This is one of the largest private equity deals in a listed Indian pharma company this year, and it also makes Temasek the single largest institutional investor in Glenmark Pharmaceuticals Limited.

Temasek, through its wholly owned indirect subsidiary Aranda Investments will subscribe to 10.8 million preferential shares at Rs 875 each, and the deal will help Glenmark reduce its debt to equity ratio reduce to 0.8 to 0.5.

Chief executive officer Glenn Saldanha says that such markets would contribute only 20 per cent to sales and that he was counting on strong growth in the United States to offset weakness in emerging markets. The company plans to introduce a dozen new medicines in the US.

The company is one of the few to have received a steady number of FDA approvals to launch generic products this year. Unlike other local manufacturing units who have had to wait longer in the face of changing reviewing processes of the regulator.