Nicholas Piramal buys partner''s 50% stake in Sarabhai Piramal
By Mumbai: | 26 Dec 2003
Mumbai: Nicholas Piramal India Ltd (NPIL) has announced the buyout of its partner's 50-per cent stake in Sarabhai Piramal Pharmaceuticals Pvt Limited (SPPL) for Rs 693 million. SPPL is a 50:50 joint venture of NPIL with Ambalal Sarabhai Enterprises Limited (ASE). The company had FY2003 sales of Rs 1.8 billion and a profit after tax of Rs 176.5 million.
Says Ajay Piramal, chairman, NPIL: "The SPPL buyout is in line with Nicholas Piramal's objective of consolidating its pharmaceuticals portfolio. This acquisition will elevate NPIL to the fourth position in the domestic market with a 4.4-per cent marketshare."
NPIL had invested Rs 225 million in SPPL and has received dividends aggregating Rs 240 million till FY2003. Profits for FY2004 will accrue fully to NPIL.
SPPL commenced full operations in FY99 with sales of Rs 587.5 million. The company currently has 12 brands with sales over Rs 50 million, forming over 60 per cent of its sales. Out of this, five brands have sales over Rs 100 million. SPPL's leading brands include Pentids, Esgipyrin, Tossex, Mazetol, Resteclin and Suganril.
As per ORG-Marg MAT October 2003, the deal increases NPIL's domestic formulations market share to 4.4 per cent, up from the current 3.4 per cent, bringing it to fourth rank. Besides, NPIL will also improve its ranks in therapeutic segments such as pain management (No 1 from No 7), CNS (No 2 from No 4), respiratory (No 3 from No 4) and hormonal (No 5 from No 8).
On the market coverage front, NPIL's field force will now increase to 2,805 up from 2,010 at present, making NPIL the distinct leader in India market-reach. The deal enhances the field force available for marketing of products of the two companies in eight therapeutic areas.
NPIL is the flagship company of the Rs 3,500-crore Piramal Enterprises (PEL), one of India's largest diversified business houses. PEL also has interests in retailing, textiles, auto-components and engineering. The group is headed by Ajay Piramal, who is also the chairman of NPIL, and among the most respected names in Indian industry.