Drugmaker Shilpa Medicare has approved raising funds to the tune of Rs 325 crore through a rights issue. The rights shares will be issued in due course to existing shareholders on the record date.
Dates of the rights issue will be notified in due course of time. The board has also constituted a rights issue committee to determine the terms and conditions of the issue, the entitlement ratio, issue price, and other modalities.
A rights issue is an invitation to existing shareholders to buy additional new shares in the firm. This mechanism gives existing shareholders securities known as rights. With the rights, the shareholders can buy new shares at a discount to the current market price on a stated or a future date.
Additionally, the board has also approved the amalgamation of Shilpa Therapeutics with itself. Shilpa Therapeutics is a wholly-owned subsidiary of Shilpa Medicare and that the merger does not fall under the purview of related party transactions.
Shilpa Therapeutics is in the business of manufacturing Orally dispersible films (ODF). It has a manufacturing unit with in Dabaspet, Bengaluru, which manufacturers ODF and Transdermal patches. The merger is being done to consolidate the operational synergies and the cost, according to Shilpa Medicare, who also said that the merger will enhance the growth of the business and attain objectives in a more efficient manner.
The merger will have no impact on the shareholding pattern of the listed entity, Shilpa Medicare said.
Shares of Shilpa Medicare are trading 0.6 percent lower at Rs 252.55. The stock is down 10 percent on a year-to-date basis.
