Mumbai: Hyderabad-based Anu's Laboratories, which proposes to hit the capital market on May 12, has fixed a price band of Rs 200 to Rs 210 per equity share for its forthcoming initial public offering (IPO).

The company would offer 38,20,000 equity shares of Rs 10 each through 100 per cent book-building process.

Anu's Labs is engaged in the manufacturing of basic, advanced intermediates and fine chemicals and supplying them to various drug manufacturers.

In order to diversify and expand its business activities by means of forward integration, the company has decided to set up a new plant for manufacturing of drug intermediates including, active pharmaceutical ingredients (APIs), at Vishakhapatnam at an estimated cost of Rs 55.09 crore.

The company is also setting up a pilot plant for carrying out contract research and manufacturing unit at an estimated cost of Rs 8.34 crore.

"The proceeds of the issue would be mainly used to set up a bulk drug manufacturing unit in Visakhapatnam, that is being set up to help the company move up the value chain," Anu's Lab's Managing Director, Hari Babu, told reporters on Tuesday.

"We have identified contract manufacturing as one of the options to maintain growth and profitability, as that offers low-cost manufacturing base," he said.

As per estimates, the contract manufacturing of drugs would be worth 900 million dollars in India by FY10.

"The implementation of the ongoing expansion will enable us to forward, integrate and add other products in our portfolio," Anu's Director, N S Walimbe, said.

After allowing a reservation of 2,00,000 equity shares for eligible employees, the net issue to the public will be 36,20,000 equity shares, constituting 31.63 per cent of the post-issue paid-up capital of the company.

Source : PTI