IOL Chemicals see 10% price rise in case shortages increase; shares gain most in over two years

For instance, API for Paracetamol now costs Rs 550 per kg compared to Rs 450 earlier, while API for Azithromycin has become expensive by 15 percent in a fortnight from Rs 8,700 per kg to Rs 10,000 per kg.

Prices of API for Amoxicillin have also advanced by 13 percent from Rs 2,850 per kg to Rs 3,200 per kg, while those of Potassium Clavulanate has risen to Rs 19,500 per kg from Rs 17,000.

CNBC-TV18 has not verified this report independently.

The development is of significance as the Indian pharmaceutical sector depends heavily on APIs from China. Any supply disruption in APIs may squeeze margins for pharmaceutical companies and raise drug prices, while also possibly leading to drug shortages, warned the industry executives.

The ET report also suggests that fears of supply disruption of APIs are stirring up not just due to the escalating Covid-19 situation in the country, but also due to Chinese New Year festivities.

IOL Chemicals and Pharmaceuticals Ltd., one of the top pharma API and specialty chemicals manufacturers in the world, told CNBC-TV18 that the APIs of Ibuprofen, Paracetamol, and Levocetirizine are witnessing a shortage in the US, European Union regions, and China. However, no such shortage is currently seen in India.

IOL Chemicals warns of a 10 percent increase in the prices of APIs in case the shortages increase. The company, which has a certificate to export to the US, EU, Latin America as well as the Middle East, expects a 4-5 percent rise in exports over the next quarter.

Meanwhile, some other leading API companies told CNBC-TV18 that they weren’t facing any huge disruption in prices or supplies of APIs as of now. The situation is more likely to be a temporary disruption, they believe.

Shares of IOL Chemicals ended 13.86 percent higher at Rs 398.50.