New Silk Route to invest in Indian drug company

Nectar Lifesciences has received board approval to issue up to 26m equity shares to the private equity firm.

Bombay-listed pharmaceutical company Nectar Lifesciences is to issue 26 million equity shares to Asian growth capital firm New Silk Route, subject to shareholder approval, according to a company statement. 

New Silk Route did not reply to requests for comment at press time.

Nectar Lifesciences manufactures an oral range of active pharmaceutical ingredients and finished dosage forms. It exports its products to more than 45 countries across five continents. The company booked a cash profit of about INR946 million ($21 million; €14 million) for the quarter ending 30 September 2009.

Based on the company’s share price of INR41 at time of press, the firm is to invest approximately INR1 billion for a stake of about 15 percent in the company, taking into account the increased share capital. The company’s share price rose 7 percent from INR38.5 per share on Tuesday, following the news.

Nectar Lifesciences also intends to issue instruments such as global depositary receipts, foreign currency convertible bonds and fully or partially convertible debentures of up to INR2.5 billion, the statement said. 

In May 2009, New Silk Route invested INR1.35 billion for a roughly 8 percent stake  in KS Oils, an Indian edible oil company. Similarly, the capital was raised through the issue of equity shares and convertible warrants.

The firm’s previous investments in India are: infrastructure providers Aster Infrastructure and Aster Teleservices; retail financial services company Destimoney; media and entertainment company INX Media; telecom infrastructure provider Reliance Infratel; bearing races maker Rolex Rings; and  cable and broadband access network operator and service provider Ortel Communications. 

Founded in 2006, New Silk Route manages assets of more than $1.4 billion and has offices in New York, Mumbai, Bangalore and Dubai.