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US-BASED private equity firm New Silk Route Partners (NSR) has picked up a little over 30% in Chandigarh-based listed pharma company Nectar Lifesciences for Rs 250 crore at Rs 35 per share.

   The deal was structured through a combination of GDR and issue of fresh shares so that the transaction does not trigger the takeover code of the Securities and Exchange Board of India ((Sebi).

   Under the takeover code, the acquisition of 15% equity stake by an individual or group of persons acting in concert in a listed firm triggers the takeover code following which the acquirer needs to give an open offer to buy 20% stake from the market either at the acquisition price or the average price of previous six weeks, which ever is higher.

   Under the deal, NSR picked up 20.5% equivalent to 46 million equity shares stake through global depository receipts route for Rs 160 crore and the balance was acquired directly as underlying equity shares for Rs 90 crore.

   Since the acquisition of shares through GDRs route does not attract Sebi’s takeover code, it was the preferred route for investment, said Parag Saxena, founding partner and chief executive of New Silk Route Partners.

   Mr Saxena said, NSR was looking at investing in high-end skilled manufacturing in chemical and pharmaceutical sector. Nectar Lifesciences has good infrastructure injectible generic manufacturing.”

   Under the deal, NSR will have two nominees—Mr Vivek Seth and Mr Raman Kapur on the board of the company. Following the completion of the transaction, promoters stake in Nectar Lifesciences will come down to a little below 45% from the current, 64%.

   “We are going to play an active role in the management of the company in enhancing its growth rate from current level of 35% and also help in accessing more regulated market of Europe and the US,” Mr Saxena said.

   In the first three quarter, the company has reported a net profit of Rs 81 crore on Rs 704 crore revenues.  

   New Silk Route is a leading Asia-focused growth capital firm founded in 2006 with over $1.4-billion under management, focused on the Indian subcontinent, as well as other rapidly growing economies in Asia and the West Asia. The firm is led by Rajat Gupta, Victor Menezes, Parag Saxena and Dr A Hafeez Shaikh.

   Till now, NSR has invested close to $600 million in 11 Indian companies.
   “Since the first investment in Aster Infrastructure in 2007, with majority control, we have invested in around 11 companies. Barring Reliance Infratel, we are an active investor. Reliance Infratel is the only passive investment,” he added.

   NSR is looking at cashing out some of the old investment either in parts or completely. Without divulging any detail, Mr Saxena said that the company is looking at churning investments in some of the portfolio companies.

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