Divi's Laboratories Ltd, the manufacturers of generic active pharmaceutical ingredients (APIs) and intermediates, plans an initial public offer (IPO) by February 2003 to part finance its expansion programme. Promoted by Murali K Divi, the company has its bulk production unit and an R&D division at Longojigudem in Nalgonda district. The Rs 200-crore turnover company is setting up a second bulk drug unit in Chippada village, near Visakhapatnam at a cost of Rs 43 crore. The company has already invested about Rs 25 crore and the plant is near completion, according to Kishore Babu, General Manager, Finance.

The Hyderabad-based Divi Laboratories is also in the business of contract manufacturing of custom synthesis intermediate compounds.

The company proposes to issue 32.04 lakh equity shares of Rs 10 each to the public, of which 19.35 lakh are being offered to the existing shareholders who invested in 1994 by way of fully convertible debentures. An additional 12.69 lakh equity shares would be issued afresh by the company. Though the company is yet to fix the date for the IPO and offer price for the two categories of fresh and existing shares, it expects a share premium of Rs 27.72 crore from the IPO.

According to the draft prospectus filed with the Securities and Exchange Board of India (SEBI), the company's subscribed and paid-up equity capital currently stands at Rs 11.54 crore.

The new unit near Visakhapatnam will produce active pharmaceutical ingredients (API) and intermediates like Naproscin andDL Naproscin which are used in the making of antibiotics. Besides, the unit will be manufacturing a variety of generic products such as naproxen, iopampidol and diltiazem. The unit will also produce therapeutic products like refocoxib and etroicoxib (anti-inflammatory), almotriptan and sumatriptan (anti-migraine) and pipisartan, candesartan and irbesartan (anti-hypertensive). The company has already firmed up marketing tie-ups with a number of multinationals like Abbott, Glaxo Wellcome and the Germany-based Boeringer HAM.

After obtaining all the necessary approvals in the next two to three years, the company proposes to produce APIs for the advanced and regulated markets from the new facility.

The company's main plant in Nalgonda district had achieved a turnover of Rs 207 crore with a net profit of Rs 37.57 crore in 2001-02. During the current year the company is expecting a turnover of Rs 300 crore.

In order to become one of the most cost-competitive manufacturers of APIs for the formulators in the open market and be a supplier of choice to the formulators in the regulated markets, the company has obtained ISO 9001, ISO14001, OHSAS 18001 and safety certifications. The company'smain plant was inspected by US FDA in 2000 and cleared for exporting APIs and intermediates to the US.