Amrutanjan Health Care, the maker of Amrutanjan range of pain balms, vapourising gels, and cold rub, has decided to spin off its business into two entities ? OTC products and pharma ? in a bid to tap the multi-billion dollar contract, research and manufacturing services (CRAMS) business potential both in the domestic as well as domestic markets. The move will allow the company to create value for its existing businesses of OTC and pharma (fine chemicals).
As part of this exercise, the company has decided to rope in KPMG as the advisor to the restructuring exercise. The company will float two new subsidiaries to demerge its OTC business into one subsidiary company and transfer the pharma business (the pharmaessense chemistry services division) into another subsidiary, company sources said.
A three-member committee, comprising the existing directors of the company, has been set up to look into restructuring as well as to take stock of the KPMG’s recommendations on tax and other regulatory aspects. Based on its evaluation and KPMG’s suggestions, the committee will put the findings before the board of directors for further action, sources said. When contacted, a senior official of the company said: “The move is aimed at strengthening the existing businesses and take them to a new horizon in a more effective manner and to create more value for the stakeholders concerned.”
He said the pharmaessense chemistry services division, earlier known as fine chemicals, is comparatively a small division and contributes meagrely to overall sales. The division, which is involved in CRAMS segment, serving both domestic and overseas clients, has opportunities to grow in the multi-billion dollar CRAMS space, and the move will give a necessary push towards this.
Meanwhile, the company has decided to withdraw the buy-back offer made in January this year as the share price gone up over and above the buy-back offer price of Rs 550 per share. The share price at one point of time even touched a high of Rs 1,340.