Corinth Group of Switzerland to invest USD 100 million in Morepen Laboratories

The board of directors of Morepen Laboratories Limited has approved the investment proposed by Corinth Group, a global private investment group, headquartered in Switzerland, to the extent of USD 32.50 million in the parent company, Morepen Laboratories Limited out of a total USD 100 million investment in the promoter group. 

Following shareholder & regulatory approval, Corinth would be allotted 58.50 million new equity shares on a preferential basis. This shareholding would equate to a 9.41 per cent equity stake in the company on a fully-expanded capital base. The balance of USD 67.50 million would be in the promoter group companies. 

The board of directors has also approved the allotment of 50 million fresh equity shares to the promoter group in lieu of the 98.50 million unsubscribed warrants issued in the last financial year, which lapsed due to technical reasons. The new allotment would be at Rs 38 per share, which will be 52 per cent 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 would go up to 44.28 per cent from 34.54 per cent, on a fully-diluted basis. 

The total fund infusion in Morepen Laboratories Ltd, including investor funds and promoter’s equity, will be Rs 565 crore, which would be used for the following – 

- The expansion/scaling up of the company’s R&D centre/facilities to meet the significantly enhanced active pharmaceutical ingredient (API) demand, having a market size of USD 40 billion, that Morepen has in the pipeline for the next 3 years. 

- Setting up of 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 the regulated markets such as the USA and Japan. 

- Investment into world-class diagnostics facilities including the manufacture of critical inputs/components/enzymes to meet regulated market standards. India is seeing an exponential jump in household spend on point of care/home diagnostics & oxygen concentrators along with other life support systems with demand currently outstripping supply. 

- Investment in new products & brands under Dr Morepen umbrella, an existing household brand, to leverage its pan India distribution/supply chain and exponential growth in online sales. 

- Investment in the new age personal care/skincare brands such as ‘Gubb’ and ‘Happier’ that are seeing exponential online sales, as well as to leverage the company’s pan India pharmacy/retail chain network to significantly scale up distribution. 

On Wednesday, the stock of Morepen Laboratories opened at Rs 51 and surged 3.1 per cent to Rs 52 from its previous close of Rs 50.45 on BSE.