The steps are a part of the company's plans to list internationally in about six months. The Foreign Investment Promotion Board (FIPB) has just given its approval and investment bankers will be approached in the next 3-4 months, Bhartia adds.
Also read: Jubilant Life to consolidate pharma biz under S'pore unit
Below is the edited transcript of his interview to CNBC-TV18.
Q: Is an international listing the key rationale for this internal restructuring?
A: We have 70 percent of our pharma business in the Singapore subsidiary already. The businesses which exists in US three large manufacturing facilities in the US and our European facility also; we are transferring 30 percent of our Indian pharma business to it.
It forms only 30 percent of our total assets and around 29 percent of sales of total pharma sales.
Q: The Singapore subsidiary is a wholly owned subsidiary. So, this is an internal transfer. How have you valued 30 percent of your pharma business as you have valued it at Rs 1,145 crore, correct?
A: That is right. This has been valued by the certified valuers and on the basis of the valuation proposed the FIPB to transfer this business at this price. We are likely to do that in next 4-5 months. Singapore subsidiary then will have almost 100 percent of our pharma business.
Q: Is listing the only option or you are also open for any stake sale in the pharma business as you have clear demarcation in the two businesses?
A: We are not looking at stake sale at all. We are looking at international listing of this business in Europe or US. We would like to talk to the investment bankers now in next 3-4 months and within about 6 months we would like to list this business internationally through part of equity sale.
Q: Can you give me more details on this pharma business which will be in Singapore? What could be the consolidated debt on pharma business because this 29-30 percent of the business is nearly 80 percent of the market cap of the company. So, the investors or analysts really want to know more details in terms of financials?
A: The total debt in the pharma company is likely to be around USD 450 million after this transfer.
Q: Will there be anything left on the Indian business which will be left after transferring the pharma business?
A: Our life science ingredients business, which constitutes almost 50 percent of the business, will be in the Indian company Jubilant Life Science standalone. It forms almost 50 percent of the total business. So, 50 percent of our business is pharma business and 50 percent is life science ingredients business.
Q: Have you already started talks with some of the bankers to list this company overseas?
A: The board has just taken a decision. We have achieved just now FIPB approval. In next 3-4 months time we will be talking to the investment bankers.
Q: While it might benefit your local shareholders to see a business being transferred at such a substantially high valuations, I am wondering if there is any cash involved or any pay-out involved to promoters.
A: There is no cash involved to the promoters because this is internal transfer. So, all the cash will come from the subsidiary to holding company which is Jubilant Life Sciences.
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