Tube Investments of India (TII), part of the `54,722-crore Murugappa Group, on Tuesday, announced its foray into the pharma sector. It will engage in contract manufacturing, research and development of active pharmaceutical ingredients (API).
TII has identified contract development and manufacturing organisation (CDMO) and active pharmaceutical ingredients (API) as its new line of businesses.
TII will incorporate a new subsidiary for the establishment of CDMO business and it will focus on API and other products. The company proposes to invest up to `285 crore into this subsidiary in the form of equity and compulsorily convertible preference shares in tranches. N Govindarajan, former MD of Aurobindo Pharma and a well-recognised industry professional, has been roped in to form the subsidiary.
The company has been focusing to diversify its business by identifying new growth opportunities and has recently entered into clean mobility, electronics and alternate fuels.
MAM Arunachalam (also known as Arun Murugappan), executive chairman of the company, said, “TII’s foray into CDMO, a business with high growth potential, augurs well with its plan to diversify its business portfolio and reduce dependency on traditional revenue streams. TII is delighted to join hands with Govindarajan, a well- accomplished professional in the pharmaceutical industry in India.”
Govindarajan will be the CEO of the subsidiary and will be establishing the business and driving its growth and profitability. He will be investing up to` 15 crore in equity and compulsorily convertible preference shares in tranches. Subject to the performance and other terms and conditions specified in the agreement, Govindarajan will be entitled to get up to 25% of the equity for his investment.
Commenting on the partnership with TII, Govindarajan said, “I am privileged to partner with Murugappa group for its entry into CDMO business and looking forward to work with TII to make the new venture a great success.”
TII manufactures fabricated metal products and specialises in cycles, steel tubes, strips, chains, and metal formed items. Recently, the company said it will start rolling out its much-awaited electric three-wheeler Montra and e-truck in March-April while the e-tractor will be launched by July, through its newly formed mobility arm TI Clean Mobility.
