Balaxi Pharmaceuticals Limited has announced that its Board of Directors has approved the issuance of 11,00,000 Equity Shares/Warrants on Preferential Basis.

The Board of Directors, in accordance with applicable laws, determined the price of Rs. 451 per Equity Share/Warrant, aggregating to Rs. 49.61 crore. The Preferential Issue is subject to the approval of the company’s shareholders, and other applicable statutory approvals.

Proceeds from the proposed issue will be utilized to part finance Balaxi’s planned EU GMP-compliant manufacturing facility for Oral Solid Dosages and Liquid Injectables at TSIIC Pharma Formulations SEZ, Jadcharla, near Hyderabad. This estimated Capex is Rs. 90 crore.

The Oral Solid Dosage (OSD) Block is slated to be commissioned in March 2024 and the Liquid Injectables Block is slated to be commissioned in June 2024. The production will commence within two months of commissioning on obtaining WHO-GMP certification and site transfers for various products which are currently being contract manufactured from other contract manufacturing organisations for several existing high potential markets in Latin America which afford strong growth visibility for the company.

The EU-GMP certification is expected within 6 months of commissioning. Establishing manufacturing capabilities will have an attractive return on investment on the Capex, which would be around 30-35 percent per annum on a steady state basis. Apart from this return on the incremental Capex investment, there will be key qualitative long term returns backed by the EU-GMP certification from customer engagement, an incremental focus on premiumisation and several other strategic benefits for the business.

Rajasthan Global Securities Private Limited, a Qualified Institutional Buyer, subscribed for 3,19,000 Warrants and is the Anchor Investor for this Preferential Issue.