Solara Active Pharma Sciences has announced the demerger of its CRAMS (Contract Research and Manufacturing Services) and Polymers business from the Generic API business (Catalog API). The move is expected to unlock significant shareholder value and enable better focus on the newly created business.
Key Details:
- Revenue Contribution: The CRAMS and Polymers business is estimated to generate INR 1,200 million in FY25 revenues.
- Focus on Growth: The company plans to scale this business over the next 4–5 years, investing in its expansion.
- Debt Transfer: INR 2,000 million of debt will be transferred to the new company, providing a stronger balance sheet for the Catalog API business and improving ROCE and ROI.
- Net Debt Post-Restructuring: Following the restructuring and rights issue, the Catalog API business will have an estimated net debt of INR 3,000 million, equating to a net debt-to-EBITDA ratio of approximately 1.5.
- Shareholder Proportions: Existing shareholders of Solara will receive proportional shareholding in the newly created company.
- Strategic Infrastructure: The Vizag site will exclusively support the growth of the CRAMS platform.
The board has given in-principle approval for this restructuring, aiming to maximize shareholder returns while leveraging Solara’s existing technological capabilities.
