Mukesh Ambani's Reliance Industries and Godrej are in talks with the All India Organisation of Chemists and Druggists (AIOCD) for partnership in the latter's proposed corporate pharmacy chain, the All India Origin Chemists and Distributors Ltd (AIOCDL).
The AIOCDL, which is set to commence operations by April 2007, will have 500,000 retail outlets belonging to its existing members, making it the country's largest pharmacy chain.
Reliance Industries and Godrej are exploring the possibility of joint ventures with AIOCDL as part of their plan to enter the Rs 30,000-crore (Rs 300 billion) retail pharmaceutical market.
Sources close to the development said AIOCDL would take a decision on the issue shortly. JS Shinde, president of AIOCD and founding chairman of AIOCDL, told Business Standard the companies had approached the organisation with various joint venture proposals, but declined to divulge details.
"We have kept the option open and will choose a partner once there is clarity on the synergies," he said.
The Maharashtra State Chemists and Distributors Alliance Ltd (MSCDAL), the first corporate pharmaceutical retail venture under AIOCDL, is scheduled to start operations by April 2007.
The company's board will initially have seven members, a figure that may go up to 15 with the induction of more professional directors. Shinde will be the founder chairman of MSCDAL.
According to AIOCD's organised retail plans, there will be 36 pharmaceutical retail companies under its fold, spanning 28 states. The AIOCD will be the holding company for all these state healthcare retail ventures.
The MSCDAL, with 40,000 retail outlets in Maharashtra, will have an initial equity capital of Rs 50 crore (Rs 500 million). It will start collecting Rs 30 crore (Rs 300 million) of equity share capital and another Rs 20 crore (Rs 200 million) of preference share capital this month.
The company would market only branded formulations, while the domestic generics business and exports would be handled directly by the AIOCDL, Vaijyanth Jagushte, treasurer, Maharashtra Chemists and Druggists' Association, said.
