Divi's Laboratories advanced further on Tuesday to touch its all-time high of Rs 221 on sustained buying support from institutions.

However, by 12:30 IST, the stock of the pharmaceutical firm slipped and was still up by 4.98% at Rs 210.80 on the BSE, recovering sharply from its low of Rs 197.15. A relatively higher volume of over 362,000 shares was recorded on the counter.

As per market buzz, Reliance Capital Mutual Fund has been accumulating the stock at every lower level since the last few sessions.

Divi's Laboratories stock made its debut on the BSE on 12 March 2003 at Rs 161.10. On the NSE, the stock opened at a modest premium at Rs 155 on the same day. From its listing price of Rs 161.10 on the BSE, the stock has risen by 37.2%.

DLL came out with an initial public offer of 32,04,684 equity shares of Rs 10 each in February this year. 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. The floor price for the issue was set at Rs 130 per share. The IPO opened on 17 February and closed on 21 February 2003.

The IPO was a huge success, being oversubscribed by nearly 20 times (aggregate 6,24,82,900 shares at a bid price of Rs 140). With the issue, the equity capital of the company has increased to Rs 12.82 crore from Rs 11.55 crore.

DLL 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.

DLL is a leading contract research and manufacturing company. It has a multi-purpose manufacturing facility on a 300-acre site located near Hyderabad in Nalgonda district of 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.

DLL 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 inspected by the US Food & Drug Administration for the manufacture of APIs and intermediaries, and six of its products have been approved for sale in the US markets. 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, DLL 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.

For the half year ended September 2002, DLL reported a total income of Rs 122.03 crore 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.

The promoters held a 59.96% equity stake in DLL before the IPO. Post-IPO, their holding has slipped to 54.02%.