The Hindu Business Line : SMS Pharma to raise Rs 98 cr via IPO

TAPPING NEW SOURCE: Mr P. Ramesh Babu Potluri (right), CMD, SMS Pharmaceuticals Ltd, with Mr V.S. Narayanan, Senior Vice-President, UTI Securities, at a press conference to announce the company's IPO in Mumbai on Monday. - Paul Noronha

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Mumbai Jan. 29

SMS Pharmaceuticals Ltd is coming out with an IPO to raise around Rs 98 crore in the upper end of the price band of Rs 360-380 per share. The proceeds will part-finance setting up of a new facility to manufacture active pharmaceutical ingredients (API) in Andhra Pradesh.

On offer are 25.77 lakh equity shares forming about 25.77 per cent of the fully diluted post-issue paid up capital of the company. The issue opens for subscription on February 5 and closes on February 8.

At least 50 per cent of the net issue to the public shall be allotted on a proportionate basis to qualified institutional buyers (QIBs). Further, 15 per cent of the net issue shall be available for allocation on a proportionate basis to non-institutional bidders, while 35 per cent of the net issue to the public shall be available for allocation on a proportionate basis to retail bidders.

The new plant near Vizianagaram will cost Rs 113 crore.

"The new facility will manufacture anti-viral, anti-migraine and anti hypertension drugs, which we believe are high margin businesses," said Mr Ramesh Babu Potluri, Chairman and Managing Director. The company has already raised Rs 14 crore through pre-IPO placement and Rs 30 crore from term loans. UTI Securities is the book running lead manager to the issue.

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