Parabolic Drugs Limited's IPO opens on June 14, 2010

By Representative:
By Representative: Chandigarh based manufacturer of APIs and API intermediates, Parabolic Dugs Ltd. ("The Company") proposes to enter the capital markets with an IPO ("The Issue") of equity shares to raise resources to the extent of Rs.20,000 lacs. The IPO opens for subscription on June 14, 2010 and closes on June 16, 2010 for QIB bidders and on June 17, 2010 for Retail, Non-Institutional and Eligible Employees. The issue also comprises of an offer for sale of 20,25,702 Equity shares by BTS India Private Equity Fund Ltd. and Alden Global (Mauritius) Ltd and a reservation of 5,00,000 equity shares for subscription by eligible employees (The "Employee Reservation Portion").

The Issue is being made through the book building process wherein up to 50% of the Net Issue (Fresh Issue less the Employee Reservation Portion) will be available for allocation on a proportionate basis to Qualified Institutional Buyers. Further, not less than 15% of the Net Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% will be available for allocation on a proportionate basis to Retail Individual Bidders.

The Company intends to utilize the proceeds of the issue towards financing its capital expenditure plans and prepayment of loans. The Company proposes to invest Rs. 2,032.08 lacs out of the Net Proceeds of the Fresh Issue, for the establishment of its third multipurpose block in Derabassi (MP III). This proposed facility is expected to manufacture the Company's latest range of niche oral Cephalosporins and carry out the non-sterile steps for sterile products in order to augment the production of Cephalosporin. This facility would also be used to execute orders received for contract manufacturing of Cephalosporin molecules. The Company also proposes to utilize Rs. 3,255.25 lacs out of the Net Proceeds of the Fresh Issue, for the establishment of a Sterile Cephalosporin plant in Derabassi. This facility is proposed to be built according to international cGMP specifications to enhance the sterility assurance through avoidance of contamination.

Further, The Company also proposes to utilize Rs. 1,603.78 lacs out of the Net Proceeds of the Fresh Issue, for the establishment of the Chachrauli plant to match to international cGMP specifications. This would include setting up additional infrastructure for automation of processes, additional purified water arrangement, super finishing jobs in the plant area with epoxy and special paintwork, dedicated warehouse and utilities setup with cold storage. The Company also proposes to invest Rs. 4,662.36 lacs out of the Net Proceeds of the Fresh Issue, in its subsidiary, Parabolic Research Labs Limited. Parabolic Labs proposes to establish a new custom synthesis and manufacturing site at IT Park, Panchkula, which would include a custom synthesis site with two dedicated kilo laboratories and 10 laboratories.

In addition, the Company proposes to utilize Rs. 3,883.90 lacs out of the Net Proceeds of the Fresh Issue to repay/prepay outstanding loans to ICICI Bank and UCO Bank to reduce its debt to equity ratio and enhance its debt leveraging capacity to fund its future projects.

Avendus Capital Pvt. Ltd. & ICICI Securities Ltd. are the Book Running Lead Managers and SPA Merchant Bankers Ltd is the Co-Book Running Lead Manager to the issue and Link Intime India Pvt. Ltd. is the Registrar to the issue.