Foreign banks have sanctioned loans worth 19 million Euro (Rs. 103 crore) at an interest rate of 4 per cent to Ahmedabad-based Dishman Pharmaceuticals & Chemicals Ltd, it is learnt. The company will utilize this fund to extinguish its long-term debt of Rs. 50 crore, which it owes to Exim Bank. Dishman had borrowed the amount from Exim Bank at an interest rate of 14.5 per cent.

"Dishman is expecting to accrue the euro loan in April. The aim is to clear the company's long-term debt. Gradually the company is also aiming to convert the working capital loan of Rs. 50 crore into foreign currency loans," said reliable sources.

Dishman's Initial Public Offering (IPO) has been over subscribed by 2.9 times on the first day of the issue itself. The public Issue of 3,433,500 equity shares of Rs.10 each by the company was opened for bidding on Monday, March 29, 2004.

The issue will constitute 25.01 per cent of the fully diluted post issue paid-up capital. The promoters of the company will hold the balance. The company received necessary SEBI clearance for the IPO through 100 per cent Book-Building route. The company has fixed the price band of Rs 155 to 175 per share. The management is expecting to raise Rs 55-60 crore to part finance its future plans.

Dishman currently serves a number of MNCs, including Solvay Pharmaceuticals B.V. of Netherlands, with whom the company has a long-term supply contract for patented anti-hypertensive drug Iprosartan Mesylate whose patent expires in 2013.

For the year ended March 31, 2003 Dishman reported a net income of Rs. 114.41crore as compared to a revenue of Rs. 85.29 crore in the previous year. It made a net profit of Rs. 14.26 crore for the year ended March 2003 compared to previous year's Rs. 7.10 crore.

Dishman, promoted by J R Vyas, is a research driven company in synthetic chemistry and currently it is producing Quats & Specialty Chemicals, a range of sophisticated bulk actives and intermediates. It is also undertaking contract manufacturing and contract research. It has two GMP manufacturing plants located at Naroda and Bavla in Gujarat. Its Bavla plant, set up during 1997, became a 100 per cent EOU.

For its overseas marketing and business development, Dishman has set up subsidiary companies like Dishman Cyprus Ltd, Dishman USA Inc, Dishman Europe, Dishman Holland B.V. and Dishman Africa.