Pharmaceutical company Lauras Labs injects 450 million rupees into joint venture KRKA Pharma to establish a new production facility
Laurus Labs, a leading pharmaceutical company, has announced an investment of approximately Rs 45 crore in its joint venture with KRKA d.d., Slovenia, called KRKA Pharma Private Limited. This investment will fund the construction of a new pharmaceutical manufacturing facility that will produce finished pharmaceutical products.
The new facility, expected to be completed by December 31, 2025, aims to serve both the Indian and international markets, expanding Laurus Labs' production capacity in finished formulations. This move aligns with the company's broader growth strategy, which includes strengthening its presence in finished dosage forms and enhancing contract development and manufacturing organization (CDMO) capabilities, aiming for higher profitability and expanded global reach.
Interestingly, despite the capital infusion, the shareholding structure in KRKA Pharma remains the same. KRKA holds 51% of the shareholding, while Laurus Labs continues to hold 49%. The transaction between Laurus Labs and KRKA qualifies as a related-party transaction as KRKA is a joint venture with common directors, but it is being carried out on an arm's-length basis.
KRKA Pharma Private Limited, incorporated on April 12, 2024, has an authorised share capital of Rs 270 crore and paid-up capital of Rs 215 crore. Notably, the company has yet to begin commercial operations and has recorded nil turnover so far.
Meanwhile, Laurus Labs reported a significant increase in Q1 earnings, with profit rising sharply to Rs 163 crore, up 1,154% from Rs 13 crore in the same quarter last year. Additionally, the company's Q1 revenues also rose 31% to Rs 1,570 crore from Rs 1,195 crore a year ago.
This investment in KRKA Pharma aims to support the operations of the company without changing the shareholding structure. The investment is expected to help KRKA Pharma expand its operations in India and international markets, contributing to the growth of the pharmaceutical industry.
- The investment by Laurus Labs in KRKA Pharma is a move towards supporting the operations of the company without altering the shareholding structure.
- The expansion of KRKA Pharma's operations, funded by this investment, aims to help serve both the Indian and international markets.
- In the realm of finance and investing, this investment aligns with Laurus Labs' broader business strategy, focusing on growth in finished dosage forms and CDMO capabilities.
- With the new financing, the goal is for KRKA Pharma to take advantage of the decentralized finance (DeFi) market, aiming to increase its profitability and global reach.
