Zydus Lifesciences’ board on Thursday approved a proposal to raise up to Rs 5,000 crore through a share sale, which the pharmaceutical company said will help strengthen its balance sheet by reducing debt and fuel future growth.
The fundraising may be executed in one or more tranches through a public or private sale of shares to institutional investors, rights issue, preferential allotment, or a combination of these routes, subject to shareholder and regulatory approvals, the company said in a notice to stock exchanges.
The proposed capital infusion is expected to support Zydus’ ongoing R&D investments, expansion in international markets, and upcoming launches in the specialty segment.
“Key objective is to deleverage our balance sheet by reducing our existing debt. Also, there are strategic moves that will enhance our financial ability and agility to strengthen our capital structure position for future growth,” managing director Sharvil Patel said on an investor call.
“More importantly we also have the opportunity to look at our US specialty business and scale it up beyond saroglitazar,” he said. “Also, opportunities in the international market, specifically Europe and also some more innovative assets we are looking at. So, this will allow us the capability to execute on some of these.”
On potential deal size, he said there are no actionable deals currently, but the focus is specialty business and the US market, as well as specific brands for India if any opportunity or adjacency areas.
Strong growth in profit, revenue
On Thursday, the company reported a 38% year-on-year increase in net profit to Rs 1,258.60 crore for the second quarter, when revenue from operations rose 17% to Rs 6,123.20 crore. Ebitda grew 38% to Rs 2,015.80 crore, with margin improved 5 percentage points to 32.9%.
Patel attributed the performance to “outperformance in our US and India formulations businesses, sustained high growth in international markets as well as strategic acquisitions in wellness and medtech”.
Zydus also reported positive Phase 3 results for saroglitazar magnesium in treating primary biliary cholangitis for the US market.
The fundraising may be executed in one or more tranches through a public or private sale of shares to institutional investors, rights issue, preferential allotment, or a combination of these routes, subject to shareholder and regulatory approvals, the company said in a notice to stock exchanges.
The proposed capital infusion is expected to support Zydus’ ongoing R&D investments, expansion in international markets, and upcoming launches in the specialty segment.
“Key objective is to deleverage our balance sheet by reducing our existing debt. Also, there are strategic moves that will enhance our financial ability and agility to strengthen our capital structure position for future growth,” managing director Sharvil Patel said on an investor call.
“More importantly we also have the opportunity to look at our US specialty business and scale it up beyond saroglitazar,” he said. “Also, opportunities in the international market, specifically Europe and also some more innovative assets we are looking at. So, this will allow us the capability to execute on some of these.”
On potential deal size, he said there are no actionable deals currently, but the focus is specialty business and the US market, as well as specific brands for India if any opportunity or adjacency areas.
Strong growth in profit, revenue
On Thursday, the company reported a 38% year-on-year increase in net profit to Rs 1,258.60 crore for the second quarter, when revenue from operations rose 17% to Rs 6,123.20 crore. Ebitda grew 38% to Rs 2,015.80 crore, with margin improved 5 percentage points to 32.9%.
Patel attributed the performance to “outperformance in our US and India formulations businesses, sustained high growth in international markets as well as strategic acquisitions in wellness and medtech”.
Zydus also reported positive Phase 3 results for saroglitazar magnesium in treating primary biliary cholangitis for the US market.
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