Surya Pharma eyes more fund raising via FCCB's in 6 months-13/10/10

Surya Pharma eyes more fund raising via FCCB's in 6 months

Published on Wed, Oct 13, 2010 at 16:17 |


Surya Pharma successfully concluded their USD 25 million global depository receipt (GDR) issue today. The company aims to utilize the funds for their formulation division, their subsidiaries within India and overseas as well as a few greenfield projects, said the president of finance Hari Om Bhatia in an exclusive interview with CNBC-TV18.

He added the company is eyeing some more fund raising in the ensuing months. “We are looking at the possibility of raising further money through foreign currency convertible bonds (FCCBs) in the next three-six months time,” he said.

Hari Om Bhatia, president of finance, Surya Pharma

Excerpts from Midcap Radar on CNBC-TV18 Watch the full show »
ALSO READ

* See latest News about Surya Pharma
* See previous management interviews
* See what other Experts & Brokerages are saying about Surya Pharma

Below is a verbatim transcript of Hari Om Bhatia’s interview with CNBC-TV18’s Latha Venkatesh and Reema Tendulkar. Also watch the accompanying video.

Q: You just raised some money. Can you take us through what you plan to do with your GDR raising?

A: Yesterday we successfully concluded our initial GDR issue aggregating to USD 25 million. The utilisation of this fund will primarily go into the formulation division which we started earlier this year and also into our subsidiaries both within India and outside India. Part of this money will be utilised to take up a few greenfield projects as well.

Q: You have received board approval to raise up to Rs 300 crore. Right now only a part of it has been utilized. Any more by way of fund raising maybe by the end of this fiscal that you would be considering?

A: Yes, we are looking at the possibility of raising further money through FCCB's in the next three-six months time.

Q: What kind of revenue projections can you make for FY11 since you are going in for a decent amount of expansion?

A: We have been growing at about 35-40% annually every year in last five years and this year we hope to maintain the same trend.

Q: That would mean around Rs 1,500 crore in terms of topline in FY11?

A: Yes, we should be around that.

Q: Your EPS target perhaps would be around Rs 70 mark?

A: Considering the fact that the equity levels have increased this year so maybe around the same level.

Q: Can you take us through your retail ventures. You have launched a retail store under the name Viva. Is it under your fully owned subsidiary? Will that money be reflected in the balance sheet of Surya Pharmaceutical and what are the growth projections in that division?

A: This investment is reflected as part of the investments in Surya Pharmaceutical Ltd and this is one of the subsidiaries of Surya Pharma. Under this company we had started the pharmacy retail venture one-and-half years back under the brand name Viva. We started with Delhi and NCR and since then we now have 70 operative stores as of today in Delhi, Chandigarh and Tri-City and parts of Haryana and Punjab.

Very soon we are moving into the cities of Mumbai and Hyderabad as well. By the end of this fiscal year that is March 2011 we should be having about 200 operative stores. In three years time, we aim to have more than 1,000 stores and have a pan-India presence.

Q: How is your alliance with Crocs shaping up? You had earlier given us a guidance of about Rs 100 crore over the next two years. Are things looking better than that?

A: No, we never gave the amount. We had the targets of selling the number of pairs. We started this relationship with Crocs in June this year and they are the third largest shoe brand in the world. They have one division which is lifestyle and the other is medical shoes for which we are the only marketers for them, for Indian as well as South Asian Association for Regional Cooperation (SAARC) countries for medical footwear.

Q: What are the margins in the retail space vis-à-vis the manufacturing space and what percentage of revenues at the moment comes from the retail space?

A: Retail has started just about one-and-half years back. This year we should be closing with more than Rs 50 crore topline in retail. In the coming year it increases by quite a margin. As far as the margins are concerned definitely retail margins are bigger than the manufacturing margins.