Tube Investments of India Limited (TII) has recently entered into clean mobility, electronics and alternate fuels. In line with the strategy, the company has identified contract development and manufacturing organisation (CDMO) and active pharmaceutical ingredients (API) as its new line of businesses with the potential to grow and expand.
CDMO is one of the fastest growing segments in the pharmaceutical industry as big pharma players are increasingly outsourcing R&D and manufacturing to focus on core business activity. Considering the growth potential in this sector and subject to the approval of the shareholders for amendment to the Objects Clause enabling the company to foray into CDMO, the company has signed an agreement with N. Govindarajan, a well-recognised professional having rich experience in the Indian pharmaceutical industry, for establishment of CDMO business through a new subsidiary to be incorporated. The proposed subsidiary will focus on API and other products.
N Govindarajan will be the Chief Executive Officer of the subsidiary and will be establishing the business and driving its growth and profitability. The company proposes to invest up to Rs. 285 crore into this subsidiary in the form of equity and compulsorily convertible preference shares in tranches. N Govindarajan will be investing up to Rs. 15 crore. in equity and compulsorily convertible preference shares in tranches. Subject to the performance and other terms and conditions specified in the agreement, he will be entitled to get up to 25 per cent of the equity for his investment. He is looking forward to working with TII to make the new venture a great success.
As per Arun Murugappan, Executive Chairman, Tube Investments of India Limited, 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 N. Govindarajan, a well accomplished professional in the pharmaceutical industry in India.