NEW DELHI :
The board of Jubilant Life Sciences Ltd today announced a restructuring of the company into two separate entities--one handling pharmaceuticals operations and the other its life science ingredient business.
The decision follows recommendations of a committee set up by the board in July, which recommended that the company demerge its life science ingredients business into a separate firm, while keeping the pharmaceutical operations within the current firm.
“We believe that the proposed demerger will ensure depth and focus to adopt strategies necessary for growth, unlock shareholder value with direct ownership and attract focused investors in each of the business entities," Jubilant Life chairman Shyam S. Bhartia and co-chairman and managing director Hari S Bhartia were quoted as saying in a company release.
Jubilant Life plans to also list the life science ingredients entity on the National Stock Exchange and the BSE. The life science ingredients segment manufactures specialty intermediates, which are used to make bulk drugs, as well as nutritional products and life science chemicals through five manufacturing facilities in India.
On Friday, shares of Jubilant Life closed 1.7% lower at ₹559 on the NSE. The company had made the announcement after the stock market closed.
After the demerger, the listed entity Jubilant Life will house the pharmaceutical business under Jubilant Pharma Ltd Singapore, the company’s drug discovery services operations as well as the entity that handles proprietary drug discovery business, Jubilant Therapeutics.
Jubilant Pharma Ltd Singapore handles manufacturing and supply of radiopharmaceuticals in the US, as well as makes various bulk drugs and formulations through its six US Food and Drug Administration-approved facilities in the US, Canada and India.
Jubilant Life’s consolidated pharmaceutical entity generate revenue of ₹5,567 crore in 2018-19, while the life science ingredients business contributed ₹3,553 crore to the company’s topline.
The board also accepted another recommendation made by the committee, of amalgamating the promoter shareholding companies into Jubilant Life so as to simplify the holding structure of the promoters without changing their shareholding percentage, the company said.
Jubilant Life today reported a a 19% year-on-year growth in its consolidated net profit for July-September quarter at ₹249 crore aided by steady operational performance of its pharmaceutical operations which offset the weakness in its life science ingredients operations.
Revenue from the pharmaceutical operations grew 9% to ₹1,452 crore, while that from life science ingredient segments declined 15% to ₹753 crore. Strong performance of the pharmaceutical operations led to an expansion in the company’s consolidated operating margin to 21.2% from 20.0%.