Following shareholder and regulatory approval, Corinth would be allotted 58.50 million new Equity shares on preferential basis. This shareholding would equate to 9.41% equity stake in the Company on a fully expanded capital base.
The balance USD 67.50 million would be in the promoter group companies.
The Board of Directors 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 the last financial year which lapsed due to technical reasons.
While the new allotment would be at Rs 38 per share, which will be 52% 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%, from 34.54%, on a fully diluted basis.
Accordingly, the Total Fund Infusion in Morepen Laboratories, including investor funds and promoter’s equity, will be Rs. 565 crores. The funds would 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 US$40 billion, that Morepen has in the pipeline for the next 3 years
- 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 USA and Japan
- Investment into world class 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
- Investment 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
- Investment in 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
“We are delighted to partner with the well-respected institution, Corinth Group of Switzerland, who have a dedicated fund for emerging markets, more particularly India market and healthcare. The Rs 750 crores investment by Corinth in the Morepen Group affirms our leadership position in API, Point of Care Diagnostics & OTC and the faith global investors have in our growth potential and future”, says Sushil Suri, Chairman and Manging Director, Morepen Labs Ltd.
Christopher Pissarides, Chairman of Corinth Group's Advisory Board and Nobel Prize laureate (2010) in Economics, said “The investment into Morepen follows from our increased focus on emerging markets, and in particular the health and pharmaceutical industry. India is a key global market with significant growth opportunity, and we look forward to working with management to help the business develop while catering to a rapidly growing sector.”
Andreas Matsas, CEO of the Corinth Capital Fund (www.corinthcapitalfund.com) said “We are bullish about the Indian market and have already started the process of setting up a dedicated full-service office in Delhi, India, through a wholly owned subsidiary which will be functional in May 2021. We are actively working towards setting up an AIF, in line with Indian regulatory requirements, to cater to the Indian market. Our Investment into Morepen Group establishes Corinth’s long-term commitment to the Indian market, with ongoing investments of another USD 200 million in the Agri and Logistics sector undergoing due diligence.”
Martin Walter Model, Head of Credit Committee of the Corinth Group of Companies said “Morepen is a listed research-based organisation with a 35-year heritage, USFDA approved facilities and is a business that is closely aligned to our ethos and investment strategy, giving us access to a rapidly evolving and growing healthcare sector in India. The business exports API to over eighty countries worldwide, with regulatory approvals from most markets including the USA, Europe, Japan and Korea.
In the domestic market Morepen is a leader in the point of care medical diagnostics market through is brand, Dr. Morepen. With changing lifestyles and more importantly, the recent Covid crisis, home diagnostics have and will continue to be a core part of people’s lives. It is estimated that global home diagnostics and point of care spends have gone up 20- 30 times over the past year, and Morepen is well positioned to cater to this growing global demand. As the personal health and fitness trend continues to gather pace, Dr. Morepen’s brand presence in the OTC and nutritional segment differentiates the business from others.”
Sushil Suri added: “The investment by Corinth reaffirms our position as a market leader in Indian healthcare and the scope and scale and potential of the online generics market. Corinth is also investing in with us in the multi-speciality hospital and our emerging online generics business that will allow ups to scale up the backend and front-end technology and supply chains to cater to one of the largest markets in the world”.