The Board of Directors of Aurobindo Pharma Ltd (APL), the Rs 1,050 crore pharmaceutical major in Hyderabad, has approved amalgamation of two of the group companies, Ranit Pharma Ltd and Calac Pvt Ltd, with the company. Both Ranit and Calac are in the API (active pharmaceutical ingredients) business. Ranit has got three manufacturing facilities near Hyderabad, while Calac has one facility at Cuddalore in Tamil Nadu. The merger would be effective from April 1, 2002, subject to necessary approvals from shareholders and other statutory approvals.
Aurobindo acquired 79 per cent in Ranit during April this year and the balance 21 per cent recently, making it a wholly owned subsidiary. Calac is a 100 per cent subsidiary of Ranit Pharma.
The Rs 78.96 crore Ranit Pharma posted a net profit of Rs 10.53 crore on an equity base of Rs 8.69 crore during the last fiscal. But Calac suffered a net loss of Rs 66.98 lakh on a turnover of Rs 4.37 crore. This was attributed to the loss of production and increase in overheads on account of upgradation of the facilities taken up in the year 2000.
According to Adi Reddy, company secretary, the management thought it necessary to amalgamate both these companies into APL to achieve better integration of business and substantial economy in operations, thus strengthening its position in the market with more competitive efficiency.
Since both Ranit and Calac were wholly owned subsidiaries there would not be any exchange of shares on account of the merger. Also there would not be any increase in the equity of Aurobindo in the post-merger scenario.
Aurobindo Pharma recorded a net profit of Rs35.62 crore on sales of Rs 552 crore for the first half ended September 2002.