The Board of Directors of Morepen Laboratories approved the investment proposed by Corinth Group (Corinth), a global private investment Group headquartered in Switzerland, to the extent of USD 32.50 million in the parent company, Morepen Laboratories (Morepen), out of a total USD 100 million investment in the promoter group, subject to approval of the shareholders and other regulatory bodies.
Following the shareholder and regulatory approval, Corinth would be allotted 58.50 million new equity shares on preferential basis.
This shareholding will equate to 9.41 percent equity stake in the company on a fully expanded capital base. The balance USD 67.50 million will be in the promoter group companies.
The Board has also approved allotment of 50 million fresh equity shares to the promoter group, at a price determined by the Securities and Exchange Board of India (SEBI) pricing formula for preferential issuances, in lieu of the 98.50 million unsubscribed warrants issued in FY21 which lapsed due to technical reasons.
The new allotment will be at Rs 38 per share, which will be 52 percent higher than the earlier price of Rs 25 per for each warrant.
After subscription of all the warrants, the promoter’s stake in the company will increase to 44.28 percent, from 34.54 percent, on a fully diluted basis. Accordingly, the total fund infusion in Morepen Laboratories including investor funds and promoter’s equity will be Rs 565 crore.
The funds will be used in the expansion/scaling up of the company’s R&D centre/facilities to meet the significantly enhanced Active Pharmaceutical Ingredient (API) demand, a market size of USD 40 billion, that Morepen has in the pipeline for the next three years.
It will also be used for setting up new USFDA standard API plant to meet the significant ramp up in scale and pipeline the company is working on; establishing a world-class facility for finished dosages as per USFDA standards at Morepen’s pharma complex in Baddi, Himachal Pradesh, to cater to highly sophisticated/regulated markets such as the US and Japan.
The investment will also be used for diagnostics facilities including the manufacture of critical inouts/components/enzymes to meet regulated market standards. India is seeing an exponential jump in household spend on point of care/home diagnostics and oxygen concentrators and other life support systems with demand currently outstripping supply.
The funds will be invested in new products and brands under the Dr Morepen umbrella, an existing household brand, to leverage its pan-India distribution/supply chain and exponential growth in online sales; and for new-age personal care/skin care brands ‘Gubb’ and ‘Happier’ that are seeing exponential online sales, as well as to leverage our pan-India pharmacy/retail chain network to significantly scale up distribution.