Dishman plans bond issue as IFC talks fail

AHMEDABAD: Pharma company Dishman Pharmaceuticals��� talks with the World Bank���s financial arm International Finance Corporation (IFC) to raise $30 million have failed.

The company has turned down IFC���s offer of equity dilution and will now raise Rs 150 crore through non-convertible bonds. Dishman plans to use this to fund its aggressive expansion.

When contacted by ET, Dishman Pharmaceuticals MD JR Vyas confirmed the developments. ���We did not like the terms of IFC���s offer, so we have rejected their investment proposal. We are not interested to dilute any equity as of now,��� he said.
An IFC spokesperson maintained that the proposal was still under consideration.

���An equity dilution at this stage just does not make sense. We believe that Dishman���s share price is significantly undervalued,��� company sources added.

The company fears that it will turn out to be an expensive proposition, when IFC redeems its investment after five years. ���The company may end up paying more,��� added sources.

The company has aggressive expansion plans lined up for the next five years. As per the proposal submitted to IFC, the company plans to undertake new projects, including construction of new facilities at its pharma SEZ and a greenfield production facility in Shanghai. Dishman also plans to invest in existing subsidiaries and fund future joint ventures.