There was considerable interest in Divi's Laboratories on listing on Wednesday as the scrip turned out at Rs 155, above the issue price of Rs 140.

And, the scrip of the Hyderabad-based drugs maker spurted there on, hitting the upper circuit of 20% at Rs 167.95. Volumes in the scrip on BSE touched 62,800 shares by 10:10 IST. The scrip had moved between a high of Rs 167.95 and a low of Rs 154 per share by then.

Divi's Laboratories came out with an initial public offering of 32,04,684 equity shares of Rs 10 each. Of this 12,69,673 shares involved a fresh issue and 19,35,011 equity shares were offered to the public by existing shareholders. The entire issue was made through the 100% book building method for efficient price discovery . The company had fixed a floor price of Rs 130 per share. The issue opened on 17 February 2003 and closed on 21 February 2003. Investmart India and Kotak Mahindra Capital Company were the lead managers to the IPO. The shares of the company are listed in Hyderabad, Bombay and the National stock exchanges.

The company plans to use the net proceeds of the fresh issue for replenishing internal accruals used for setting up a second manufacturing facility near Visakhapatnam in Andhra Pradesh. With the issue, the equity capital of the company has increased to Rs 12.82 crore from Rs 11.55 crore.

Divi's Laboratories is a leading contract research and manufacturing company based in Hyderabad. It has a multi purpose manufacturing facility on a 300 acre site located near Hyderabad in Nalgonda District in Andhra Pradesh. As this facility is nearing full utilisation, the company is planning to augment the manufacturing capacity by setting up a second manufacturing facility spread over 314.85 acres at a cost of Rs 40.22 crore. The second site to be set up near Vishakapatnam, will not only expand the manufacturing capacity for active pharmaceutical ingredients and intermediaries, but also provide its multinational customers an alternative plant site and assured supply. This plant is likely to commence commercial production from 1 March 2003.

The company has obtained ISO-9001, ISO-14001 and OHSAS-18001 certifications for its manufacturing operations, quality systems, environment management systems and occupational safety and health procedures. Its existing manufacturing facility has been successfully inspected by USFDA for manufacture of APIs and intermediaries and six of its products have been approved for sale in the US market. The company has also obtained Certificate of Suitability from the European Directorate, for some of its APIs for sale in Europe.

In FY 2001-02, the company reported a total income of Rs 220.25 crore (Rs 2.2 billion) and a net profit of Rs 36.57 crore. The API business and custom synthesis / new products business contributed 71.7% and 28.3% respectively. In the half year ended September 2002, the company reported a total income of Rs 122.03 crore (Rs 1.22 billion) and a net profit of Rs 22.61 crore. The API business and customs synthesis / new product business contributed 68.05% and 32.0% respectively in the half year ended September 2002.

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