Equity Watch

Jupiter Biosciences gets engaged to Ranbaxy Labs

Ranbaxy Laboratories, the country’s top drug maker, plans to acquire 14.9 per cent stake in Jupiter Bioscience Ltd, a manufacturer of specialised organic compounds, through preferential warrants.

Jupiter Bioscience today informed Bombay Stock Exchange it plans to allot preferential equity share warrants to Ranbaxy. The company, however, did not mention the price at which it will allot the warrants.

Jupiter would seek the approval of its board of directors in their April 12 meeting. This equity stake would take shape only after the Qualified Institutional Placement and conversion of promoter warrants into equity shares, it added.

On March 30, when reports first emerged about a possible stake-sale to Ranbaxy, shares of the peptide maker jumped 10 per cent (its maximum permissible limit for one day) on BSE.

The proposed warrant allotment is a part of the term sheet signed between the companies earlier which includes forging a strategic business tie-up on peptide pharmaceuticals for the global market.

Jupiter Bioscience has a wholly owned US subsidiary Jupiter Bioscience Inc, to cater to markets of peptides and peptide components in the US, Europe, Canada and Japan.

Its other 100 per cent subsidiary Sven Genetech is engaged in making nutraceuticals, cosmoceuticals and unnatural amino acids for India and unregulated markets.

In the regulatory filing on the BSE, the company said it is going to decide on the date for convening the extraordinary general meeting for considering the terms of strategic business alliance with Ranbaxy.

Source: Business Standard

Jupiter Biosciences is a 22 year old company and has R & D as its Core Competence. With Peptide and Chiral Chemistry as the main focus , company over the years has set up huge capacities of 156 MT of Peptide , 96 MT of Drug Intermediate and 120 MT of specialty Chemicals. But only 30 % is being used at present. Even at 30 % capacity usage Co. is making an EPS of Rs. 26 per share  on an Equity Capital of Rs. 8.8 crores BV of Rs. 150 and Debt : Equity of only 0.5, share is available at BV and is doscounted ( P/E ) by 6  vs. P/E of 30 for Ranbaxy.Peptide and Chiral Chemistry caters to US $ 50 billion drug industry with Peptide Precursors in Diognostics , generic peptides, vaccines and Peptide Antibiotics.Jupiter has joint marketing relations with Clariant and R & D ties with MIT (Boston ) USA and University of Toronto Canada.

Share of Jupiter Biosciences is recommended as long term BUY, and can turn out to be a Multibagger.

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision


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