New Delhi/ Chennai: Little known Solrex Pharmaceuticals Co. has bought over 8% equity in Orchid Chemicals and Pharmaceuticals Ltd, a mid-sized drug maker specializing in antibiotics, setting off speculation that Ranbaxy Laboratories Ltd is mounting a bid on the Chennai firm.
Solrex, said a person close to the deal and an analyst tracking Indian drug firms, is owned by the promoters of Ranbaxy, India’s biggest drug firm, though ‘Mint’ could not independently confirm this. Malvinder Mohan Singh, Ranbaxy’s managing director and key promoter, declined comment on if he or his family had any stake in Solrex.
Shares from the open market were picked up by Solrex between 31 March and 3 April. Shares of Ranbaxy gained 10.3% since 31 March to close at Rs483.85 on the Bombay Stock Exchange, or BSE, on Monday. Orchid shares have surged 28.4% in the same period and ended the day at Rs207.15 each. BSE’s benchmark index Sensex has gained 0.72% in this period.
K. Raghavendra Rao, Orchid’s managing director said he got to know from television reports that promoters of Ranbaxy had bought into the company adding that he was “concerned”.
“It came all of a sudden. In a free market, people can pick up stakes. The concern here is that it is a company from the same sector,” Rao told ‘Mint’ on phone, adding he had the support of financial institutions and banks and believed that “they will continue to support” him. An Orchid spokesman said Solrex was based out of New Delhi, though he had no official confirmation of who it was owned by.
The low promoter holding (under 16%) at Orchid leaves the company in a vulnerable position in a takeover situation. Some 35.28% is held by financial institutions, 19.56% by corporate bodies, 22.11% by individuals and the rest by overseas investors, according to the BSE website. On 18 March, Orchid had said in a statement that its promoters holding had shrunk 7.9% after two lenders from whom they had borrowed funds against equity decided to sell pledged shares.
Ranbaxy’s Singh has said he is on the look out for domestic acquistions. Orchid made net profits of Rs159.41 crore on sales of Rs908.47 crore in the nine months to 31 December.
Jet Airways, All Nippon to start code sharing
Mumbai:City-based Jet Airways (India) Ltd and Tokyo-based All Nippon Airways Co. Ltd, or ANA, plan to start a code-sharing and network-wide reciprocal frequent flier partnership from 21 May. With this, Jet Airways will place its flight code, 9W, on ANA’s daily business jet flights between Mumbai and Tokyo’s Narita airport.
ANA operates a Boeing 737-700ER in an exclusive all-business class configuration of 36 seats between Mumbai and Tokyo. The route was inaugurated on 1 September 2007 on a six flights per week basis, with a planned increase to seven flights per week from 11 April this year. The two airlines will link their frequent flier programmes, allowing Jet Airways’ JetPrivilege members to accrue and redeem miles on ANA-operated flights, and members of ANA’s Mileage Club programme to do the same on all flights operated by Jet Airways under the deal. P.R. Sanjai
India 3rd in S&P’s Apac sovereign league
New Delhi: In a delicious irony, India, which stands 10th from bottom among 22 countries in terms of sovereign credit ratings, goes on to be ranked third in terms of size of the economy and growth rate s in the new 2008 Asia-Pacific Sovereign League table released by the Standard and Poor’s on Monday. India is set to grow at 8.1% in 2008, after China at 9.3%, says the report. India’s gross domestic product (GDP) of $1,408 billion puts the economy right after Japan, with $4,975.8 billion, and China with $3,939.5 billion, for the second consecutive year in the league, even though it enjoys a rating of BBB-, which signifies lowest investment grade with a stable outlook.”The size of a country’s economy is not a rating factor for sovereigns, although it is an indication of global and regional clout,” the report says.
Although India is fifth from bottom in terms of nominal GDP per capita—$1,213 compared with topper Australia’s $45,025—the report expects the Indian growth story to continue.
The report warns against high inflation across the region, driven by oil demand, escalating food prices and China’s unflagging appetite for commodities. It forecasts a 4.5% inflation for India and over 5% for Singapore, a country which has had about 1% inflation historically. A Staff Writer
Top commercial vehicles makers post sales rise
Mumbai:India’s top three commercial vehicle makers—Tata Motors Ltd, Ashok Leyland Ltd and Eicher Motors Ltd—reported domestic sales of 417,005 units for the fiscal year ended March 2008, a growth of 3.65% over the year-ago period, even though rising input costs and higher interest rates continued to hamper the industry’s growth. In March alone, the three vehicle makers together sold 48,832 units, a rise of 16.46% over March 2007.
Eicher on Monday posted the highest sales growth among the top 3. Its sales during March 2007-April 2008 rose 5.9% at 27,611 units. The company’s sales in March, though, were up just 0.46% at 3,297 units.
Ashok Leyland, the No. 2 truck maker, reported a decline in its domestic sales of 1.4% as it sold 76,023 units in fiscal 2008. Including a 21% rise in its export volumes, Ashok Leyland posted total sales at an all-time high of 83,309 units during the year. The company’s sales in March were up 20.34% at 9,542 units.
Tata Motors, the country’s largest commercial vehicle maker, last week posted cumulative sales of 313,371 units during April 2007-March 2008 on the back of new launches such as the Magic and Winger passenger carriers along with a number of products in the medium and heavy trucks category. Its sales in March rose 17.16% to 35,993 units over a year ago. Ammar Master