Morepen Laboratories Limited (NSE: MOREPENLAB, BSE: 500288), a leading manufacturer of high quality APIs, home diagnostics, formulations and OTC products, yesterday approved an inbound investment of Rs. 433 crore to the Assembly General Extraordinary (EGM) of the company. Members approved the issuance and allotment of 58.50 million equity shares in cash to Corinth Investment Holdings AG, Switzerland (www.corinthinvest.com) at Rs 41.60 per share aggregated to RS. 243.36 crores.
Shareholders also approved 50 million fully convertible warrants a promoter group company Liquid Holdings Private Limited at Rs. 38 per warrant / share totaling up to Rs. 190 crore cash to be converted into equity within 18 months, within the limits prescribed by the SEBI (SAST) regulations for the acquisition of shares / voting rights during a financial year. The issue price of the aforementioned securities is calculated according to the pricing formula prescribed by SEBI in the SEBI Regulations (ICDR).
The shareholders’ meeting of Morepen Laboratories was held on May 20, 2021 by videoconference and other audiovisual means. Shareholders also voted overwhelmingly in favor of approving the resolution to issue convertible shares and warrants as proposed by the Board, over 99.97% voted in favor of the proposal.
This is an important milestone for the company, as this approval paves the way for exponential growth and value creation for all stakeholders. This EGM was the next step for the inclusion of Corinth Group, a global private investment group, headquartered in Switzerland, which announced and extended $ 32.50 million in Morepen Laboratories Limited, out of a total investment of 100 million USD in the promoter group.
Mr. Sushil Suri, President and Chief Executive Officer, Morepen Labs Ltd. (www.morpen.com) said: “Corinth’s investment further strengthens our position as the leading healthcare market in India, it also endorses our approach in the self-diagnostic tools category as well as the breadth and potential of the API market. . This is a testing time for life. Scientific and pharmaceutical companies in these difficult times and are all aimed at strengthening our capabilities and also expanding our markets. “
Sir Christopher Pissarides, Chairman of the Corinth Group Advisory Board and Nobel Laureate (2010) in the area of Economics, said: “The investment in Morepen stems from our increased focus on emerging markets, and in particular sectors healthcare and pharmaceutical industry, a global market with significant growth opportunity, and we look forward to working with management to help the company grow while responding to a rapidly growing industry. “
Speaking of the opportunities presented by the Indian market, Mr. Andreas Matsas, CEO of Corinth Capital Fund, said: “We are optimistic in the Indian market and have already started the process of establishing a dedicated full service office in Delhi, in India., through a wholly-owned subsidiary which will be operational in May 2021. We are actively working on the establishment of an AIF, in accordance with Indian regulatory requirements, to meet the needs of the Indian market. the Indian market , – with continued investments of an additional 200 million dollars in the agrifood and logistics sector subject to due diligence. “
Morepen has grown exponentially over the past four quarters despite restrictive business situations and delivered excellent results for fiscal 21, recording an astonishing 39% growth in net sales and a 189% jump in Net profit after tax over fiscal year 20. The company’s earnings per share also jumped 189% over the same period to Rs. 2.16 per share from Rs. 0.75 per share l last year. The company is present in more than 80 countries, with exports contributing 40% of total revenue and 69% of API revenue.
Morepen’s point in medical devices and diagnostics is also breaking all records and growing 71% in FY21 with increased demand for home medical devices amid a pandemic and general health problems and a changing lifestyle. The Company plans to expand its medical device business and plans to invest heavily in creating world-class facilities with great capacity and, at some point, to split this business into a separate, wholly owned subsidiary.
The full infusion of funds into Morepen Laboratories Ltd, including investor funds and promoter’s equity, would be used to:
– Expansion / scaling of the company’s R&D center / facilities to meet the dramatically increased demand for Active Pharmaceutical Ingredients (APIs), a market size of US $ 40 billion, which Morepen a in project for the next 3 years.
– Establishment of a new USFDA standard API factory to respond to the significant ramp-up and the pipeline the company is working on.
– Established a world-class facility for finished assays to USFDA standards at the Morepen Pharmaceutical Complex in Baddi, Himachal Pradesh, to meet the needs of highly sophisticated / regulated markets such as the United States and Japan .
– Investment in world class diagnostic facilities including manufacturing critical inputs / components / enzymes to meet regulated market standards. India is experiencing an exponential increase in household spending on point-of-care / home diagnostics and oxygen concentrators and other life support systems, with demand currently exceeding supply.
– Investing in new products and brands under the umbrella of Dr Morepen, an existing domestic brand, to leverage its pan-Indian distribution / supply chain and exponential growth in online sales.
– Investing in new era personal care / skin care brands ‘Gubb’ and ‘Happier’ which are seeing exponential online sales, as well as leveraging our pharmacy / retail chain network in India to increase considerably the distribution.
Shares of MOREPEN LABORATORIES LTD. was the last BSE trade at Rs.57.5 from the previous close of Rs. 58.7. The total number of shares traded during the day was 418,604 in more than 2,212 transactions.
The stock hit an intraday high of Rs. 60.6 and an intraday low of 57.05. The net turnover during the day was Rs. 24,538,496.