Balaxi Pharma's stock rallies ~6% as board approves preferential issue worth Rs49.61 crore

6 Sep 2022 , 09:44 AM

Balaxi Pharmaceuticals Limited has announced that its Board of Directors approved the issuing of 11,00,000 equity shares/warrants on a preferential basis.

In accordance with applicable laws, the Board of Directors fixed the price of Rs451 each Equity Share/Warrant, totaling Rs49.61 crore. The Preferential Issue is subject to shareholder approval and any other necessary statutory approvals.

The proceeds of the proposed issue would be used to partially fund Balaxi’s planned EU GMP-compliant manufacturing facility for Oral Solid Dosages and Liquid Injectables in the TSIIC Pharma Formulations SEZ in Jadcharla, near Hyderabad. The company estimates Capex of Rs90 crore.

The Oral Solid Dosage (OSD) Block is scheduled to open in March 2024, followed by the Liquid Injectables Block in June 2024.

Upon obtaining WHO-GMP certification and site transfers for various products that are currently contract manufactured from other contract manufacturing organisations for several existing high-potential markets in Latin America, production will begin within two months of commissioning, providing strong growth visibility for the company.

The company expects the EU-GMP certification within 6 months of commissioning.

Developing manufacturing capabilities would offer an appealing return on investment on Capex of roughly 30-35% each year on a steady-state basis.

Rajasthan Global Securities Private Limited, a Qualified Institutional Buyer, has subscribed for 3,19,000 Warrants and is the Preferential Issue’s Anchor Investor.

At around 9.35 AM, Balaxi Pharma was trading 5.65% higher at Rs662.95 apiece, against previous close of Rs627.45 on NSE. It opened at Rs675 and so far hit intraday high of Rs685.

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