The Centre may clear the proposal of the Karnataka government to acquire the stake of Hindustan Antibiotics Ltd in Karnataka Antibiotics & Pharmaceuticals Ltd in two weeks from now, it is learnt

Karnataka State Industrial Investment Development Corporation (KSIIDC) received the communication from the Centre a few days ago.

One of the main objectives of KSIIDC is to act as a nodal agency to buy out deals and its interest in KAPL has been because it is a profit making public sector undertaking with a turnover of Rs.75 crore.

The government of India through HAL holds a 58 per cent equity and Karnataka government through the KSIIDC has a 42 per cent stake in KAPL which is worth Rs. 88 lakh.

Now the State government is keen to buy up the component of HAL share in KAPL. The representation from the State has been made and KSIIDC is expecting a response within a week, according to reliable sources.

A major component of KAPL 's sales are from the government healthcare institutions, which is 70 percent and valued at Rs. 52.5 crore. The exports are Rs. 10 crore and remaining sales are generated from the domestic market.
"With a paid-up capital of Rs. 1.49 crore any pharmaceutical company in the country could go in for the deal across the table. However, there is an air scepticism among prospective buyers which are not clearly defined," they added.

With ISO accreditation from KPMG, Netherlands, the two decade old KAPL's main product focus is on antibiotics. The company offers a comprehensive range of life saving dosage forms (Pharma and Veterinary) which includes parenteral antibiotics and non-parenteral antibiotics. There is a separate dedicated facility for ß-lactam [Penicillin] injectables like Benzyl Penicillin, Ampicillin Sodium, Benzathine Penicillin, Fortified Procaine Penicillin etc.

Sources point out that the present and future focus of pharma companies are towards developing drugs for lifestyle disorder segments like cardiovascular and diabetology. There is currently no interest in antibiotics because of a glut in the market. "This could be a major deterrent factor to go in for an acquisition of KAPL", the sources informed.

While KAPL waits in trepidation for its future to be decided, there is a feeling of restlessness among its employees on account of the unexpected delays on the buyout, informed the sources.