The Bangalore-based Bal Pharma plans to come out with a rights issue in March 2005 valued at around Rs 10 crore. The company, which intends to generate funds to set up two new manufacturing facilities, has worked out the rights issue at a 1:2 ratio.
The proposed manufacturing plants, of which one is planned at Bommasandra, near Bangalore and the other at Baddi in Himachal Pradesh, would cost around Rs 35 crore for the company. Both these plants would manufacture products for the regulated markets.
"The bulk drug plant planned at Bommasandra will be a USFDA approvable facility and is expected to manufacture products that are going off patent in 2009. This will come up at a cost of Rs 15 crore and would be scheduled for commissioning by end of 2006 or first quarter of 2007," said Shailesh Siroya, managing director, Bal Pharma.
The formulation facility that is expected to come up at Baddi in Himachal Pradesh will witness an investment of Rs 20 crore. It will manufacture tablets, capsules all for the regulated markets. Currently, in the international arena, Bal Pharma is mainly in the unregulated markets. The two new plants will see Bal Pharma aggressively entering the regulated regions, Siroya informed.
In the area of R&D, the company has invested Rs 3 crore for 2004-'05. It is expected to get an NMR equipment from abroad, which would allow it to pursue its offering of Full Time Employees (FTE) for contract research to companies in the US and Europe. Presently, the company handles contract research, custom synthesis and process development to selective customers in the UK, US and Germany. The FTE revenue model is evolved to initially focus on basic research. Once the revenue model is stabilized, efforts will be on to offer services in chemical manufacturing research activities for new chemical entities (NCE's) in a phased manner. "Once the NMR is installed, we would be fully geared to handle contract research. Our objective is to capitalise the growing global research outsourcing opportunities of post 2005," stated Siroya.
The company, which has personnel strength of 1000, will hire another 300 personnel for its R&D and two production plants.
The Rs 67-crore Bal Pharma expects to clock a 30 per cent growth rate in March 2005 and register earnings to the tune of Rs 85 crore. For the future, the company wants to make its ethical marketing wing which includes Servetus, the dedicated cardio-diabetic product wing and Bal Vedics, the Ayurveda division which presently contributes Rs 22 crore to the present turnover to generate revenues to the tune of Rs 100 crore in the next three to four years when Bal Pharma's turnover is expected to touch Rs 300 crore, stated Siroya.