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Citigroup
to finalise Rs 300-cr equity investment deal in Lupin
Nisha
Das
9 May 2003
Mumbai:
Citigroup Venture Capital, a Citibank subsidiary,
is on the verge of finalising a Rs 300-crore equity investment
deal in Lupin, the third largest pharma company in India.
Citigroup is likely to complete its due diligence by the
end of the month to pick up a 26-per cent stake of Lupin's
Indian promoter, D B Gupta.
When
contacted, the Lupin management declined to comment on
this development. However, Gupta had earlier said that
the company has taken up a financial restructuring programme
and was scouting for a strategic financial investor. Lupin
has a debt burden of around Rs 600 crore.
 According
to sources close to the development, as per the current
plan, Citigroup will pick up equities in Lupin at Rs 225
per share, a premium of almost 43 per cent from the current
level of Rs 157 per share.
Citigroup
is planning to take a direct exposure of around Rs 300
crore in Lupin by acquiring the Indian promoters' equity,
which will be followed by an open offer. As per Securities
and Exchange Board of India regulations, a company acquiring
15 per cent in another company can also make an open offer,
if so chooses.
The
Lupin scrip has registered a gain of Rs 34 over a period
of one month. The scrip was quoting at Rs 123 on 1 April
2003, and closed at Rs 157 on Wednesday. Once the deal
is over, Gupta's exposure in the company will come down
to 40 per cent from the current 66 per cent.
 Lupin
is the market leader in the refampicin and refampicin
5 (intermediary), which are antibiotics used primary for
the treatment of tuberculosis.
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