Thu | Dec 13, 2018

Indies Pharma looks east - Eyes acquisition, new supplier in India

Published:Sunday | September 2, 2018 | 12:00 AMNeville Graham
Dr Guna Muppuri, CEO of Indies Pharma Jamaica Limited.
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Indies Pharma Jamaica Limited will be making a second run at the market, this time with a bond offer that is meant to finance its acquisition of a foreign company.

CEO Dr Guna Muppuri is in the process of doing due diligence on the target, which will determine whether Indies would acquire the company outright or only take a stake in the business, he said.

The assessment took him to India two weeks ago where the business is located. Muppuri is not saying much about the business, only that it's a manufacturing outfit in the pharmaceutical market meant to provide backward linkages as a source of products for distribution in Jamaica.

He said the trip to India was also used to advance discussions with a supplier for a new line of nutraceutical products for dieting, beauty care, libido and other applications, that he intends to distribute in Jamaica.

Indies Pharma listed on the junior arm of the Jamaica Stock Exchange in June following an IPO that raised $387 million, while valuing the company at $2 billion. Indies Pharma currently distributes around 175 pharmaceutical products through retail channels and in collaboration with the National Health Fund in Jamaica. It also operates its own pharmacy called Trident.

Muppuri said he aims to grow his company organically, through expansion of its product portfolio, as well as through acquisition.

"If the price is right and the timing is right we will be approaching the market to acquire the funds to get those companies," he said.

The funds raised under the IPO, which was brokered by GK Investments, will pay down debt and finance expansion. But Muppuri, in dramatic fashion, told the Financial Gleaner he will need much more funds to fuel Indies' plans for acquisitions.

"Going forward, we will need tons and loads of money because my vision is tons and loads bigger than where we are right now," he said.

"The Indian high commissioner has opened the door for us in terms of bilateral trade. We will be leveraging those connections plus exploiting my origin. The minute we closed the IPO I was exploring new product lines and company acquisitions."

Indies Pharma listed at $1.50 per share, but closed Friday at $2.67, which values the company at nearly $3.56 billion on the market moving further northward since the interview with Muppuri.

"Last week, our market capitalisation was $1.998 billion. Today, we are $2.998 billion, conservatively, and without being overly ambitious using a five-month road map my investors should be happy if the stock is trading at 11 times book value," Muppuri said.

Indies Pharma recently placed advertisements for seven job positions as it lays the groundwork for expansion

neville.graham@gleanerjm.com