Sources close to the company said that the funds accruing from the proposed issue may also be used for acquiring formulation brands. The private placement would essentially be made to FIIs and institutional investors and be done via the book building process.

As on March 31, 1999, Aurobindo Pharma's equity share capital was Rs 9.45 crores, while the preference share capital stood at Rs 9 crores. Promoters account for 73 per cent of the company's share capital.

Aurobindo Pharma's formulations business currently accounts for Rs 15 crores (or 2.72 per cent) of the company's turnover of Rs 550 crores and sources say that this is expected to increase to 12-15 per cent in three years.

As part of its strategy to boost its formulationsbusiness, the Rs 550 crore Aurobindo Pharma plans to identify therapeutic segments with high growth potential and set up specialised marketing teams for each area.

A company press release said that other measures include pursuing "strong organic growth in the existing formulations business by expansion of current brands, introducing new brands and adopting an aggressive marketing approach".

The company is also in an advanced stage of commissioning two more formulations facilities at an investment of Rs 25 crore. Aurobindo already has six manufacturing facilities, five of them in Andhra Pradesh and a bulk drugs unit in Pondicherry.

Sources also said that the company was working on plans to beef up its international business and plans were afoot to enter the Brazilian market. The company has already set up subsidiaries in the US and Hong Kong to oversee marketing operations in the Americas and the Far East, besides a joint venture outfit in Thailand.