Tube Investments of India Ltd, engaged in the manufacturing of precision steel tubes and industrial chains, would foray into contract development and manufacturing organisation (CDMO) as it plans to diversify business portfolio, the company said on Tuesday.
Tube Investments of India has identified CDMO and active pharmaceutical ingredients (API) as its new line of businesses with potential to grow.
The company, a part of the diversified conglomerate Murugappa Group, recently signed an agreement with a professional, N Govindarajan, who has rich experience in the pharmaceutical industry and for establishment of CDMO business through a new subsidiary.
The proposed subsidiary would focus on APIs and other products, Tube Investments of India said in a statement.
Tube Investments proposes to invest Rs 285 crore into the subsidiary in the form of equity and compulsorily convertible preference shares in tranches, the statement said.
“Govindarajan would 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, Govindarajan would be entitled to get up to 25 per cent of the equity for his investment,” Tube Investments said.
“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,” Tube Investments of India Executive Chairman M A M Arunachalam said.
“TII is delighted to join hands with N Govindarajan, an accomplished professional in the pharmaceutical industry in India,” said Arunachalam, also known as Arun Murugappan.
“I am privileged to partner with Murugappa Group for its entry into CDMO business and looking forward to work with TII to make the new venture a great success,” Govindarajan said. PTI VIJ VIJ HDA HDA
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