GlaxoSmithKline seeks FIPB nod to hike stake in Indian arm
New Delhi: UK-based drug major GlaxoSmithKline is knocking at the FIPB's doors to raise stake in its India arm by acquiring an additional 24.33 percent for around Rs 6,400 crore.
The proposal will come up before the meeting of the Foreign Investment Promotion Board (FIPB), headed by Economic Affairs Secretary Arvind Mayaram, on January 10.
According to sources, the Singapore subsidiary of the UK- based pharma firm will be buying 24.33 percent stake or 2.06 crore equity shares in GlaxoSmithKline Pharmaceuticals Ltd through an open offer.
After purchase, the holding of the promoter group companies in the Indian subsidiary will go up to 75 percent from the current 50.67 percent.
GlaxoSmithKline Pharmaceuticals is already majority owned and controlled by the GSK Group. "There the proposed transaction will not result in any change in control of the Indian arm," sources told PTI.
The acquisition would result in foreign exchange inflows to the tune of Rs 6,400 crore, they added.
The offer is scheduled to remain open between February 7 and February 21.
As per the FDI policy, foreign direct investments up to 100 percent is permitted in brown field investments (investments in existing Indian companies) in the pharma sector, subject to FIPB approval.
GSK Pharma is engaged in manufacturing, distributing and trading. The company's product portfolio includes prescription medicines and vaccines across therapeutic areas such as anti-infectives, dermatology, and gynaecology.
The company employs more than 5,000 people across its operations and generated more than Rs 2,600 crore turnover in the financial year ended December 31, 2012.
Besides GlaxoSmithKline, the FIPB in its January 10 meet, would also consider seven other FDI proposals for the pharma sector. These include that of Lupin, Laurus Labs, and Abbvie Japan Holdings B.V.
In total, the FIPB would consider 22 FDI proposals across various sectors.