Nicholas Piramal defers $100 mn ADR issue

Nicholas Piramal defers $100 mn ADR issue
PRESS TRUST OF INDIA

NEW DELHI, JULY 30: Pharmaceutical major Nicholas Piramal India Ltd said today it has deferred its proposed $100 million American depository receipts (ADR) issue on account of depressed US market conditions.

"We have postponed the ADR issue due to the prevailing volatility on the US bourses, " Dr Swati A Piramal, director and chief scientific officer (CSO) of Nicholas Piramal India Ltd told PTI.

In the current market conditions it would not be possible for the company's proposed ADR to command a good price, she said adding that the decision was taken following an advice by DSP Merril Lynch, global advisors to the issue.

Nicholas Piramal has already received Foreign Investment Promotion Board approval for the ADR issue which was expected to hit the market in July this year.

The company board had approved the issue in March this year, she said. The funds raised through the issue were to be used to fund its research & development (R&D), clinical trials, acquisitions and special drug development projects.

Nicholas Piramal had earlier appointed global consultancy major PriceWaterhouse Coopers to prepare its accounts as per the US Generally Accepted Accounting Principles (GAAP) in line with its overseas listing plans.

In line with its R&D programme, the company is also talking to some US-based laboratories for conducting animal trials for its drugs, Piramal said. It has also tied up with Centre for Biochemical Technology for foraying into genome research.

"We have earmarked a sum of Rs 100 crore for R&D to be spent over the next five to ten years," she said. The company will have a separate division for genome research with one centre in Mumbai and one in Delhi at CBT's Laboratory.

Nicholas Piramal and CBT will work together in the field of DNA diagnostics genome research. The company already has a similar alliance with Central Drug Research Institute, Lucknow.

"We are also looking at forming such alliances with other laboratories in the country for research and development," she said. Nicholas Piramal has already initiated genetic research in Malaria at its new R&D centre in Mumbai.

The company reported a rise of 33 per cent net profit at Rs 15.2 crore for the quarter ended June 30, 2000 as against Rs 11.5 per cent in the corresponding period last year.