Aurobindo Pharma Limited has announced the approval of its board for a Scheme of Amalgamation involving two of its wholly owned subsidiaries: Auroactive Pharma Private Limited and Apitoria Pharma Private Limited. This strategic move aims to consolidate the company’s Active Pharmaceutical Ingredient (API) businesses under a single entity, promising enhanced operational efficiency and optimized capacity utilization. The merger is expected to simplify the group’s corporate structure and is conducted at an arm’s length valuation.
Aurobindo Pharma Consolidates API Business Through Merger
Aurobindo Pharma Limited has taken a significant step towards streamlining its operations by approving a Scheme of Amalgamation for its two wholly owned subsidiaries, Auroactive Pharma Private Limited and Apitoria Pharma Private Limited. The proposal, given the green light by the respective boards and the parent company, will see these entities merge, consolidating the group’s Active Pharmaceutical Ingredient (API) businesses.
Rationale and Objectives
The primary objective behind this amalgamation is to consolidate all API businesses under a single, unified entity. This strategic consolidation is expected to drive several key benefits, including improved operational efficiency, optimized utilization of manufacturing capacities, and a simplified corporate structure for the Aurobindo Pharma Group. The transaction is being conducted at an arm’s length price, based on a valuation report from an independent registered valuer.
Key Details of the Merger
Auroactive Pharma Private Limited, incorporated on January 9th, 2020, will be the Transferor Company, while Apitoria Pharma Private Limited, incorporated on December 20th, 2017, will be the Transferee Company. For the financial year ended March 31st, 2026, Auroactive Pharma reported a turnover of INR 701.3 million, while Apitoria Pharma recorded a turnover of INR 64,430.8 million.
The share exchange ratio for the amalgamation is set at 97 equity shares of Apitoria Pharma Private Limited (face value INR 10) for every 10,000 equity shares of Auroactive Pharma Private Limited (face value INR 10). This will result in the issuance of 23,95,900 equity shares of INR 10 each of Apitoria Pharma. The total equity share capital of Auroactive Pharma is INR 247,00,00,000, consisting of 24,70,00,000 equity shares of INR 10 each.
It is important to note that this transaction, occurring between two wholly owned subsidiaries, is exempt from certain SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Furthermore, as per Ministry of Corporate Affairs Circular No. 30/2014, transactions arising from such compromises, arrangements, and amalgamations are not subject to the requirements of Section 188 of the Companies Act, 2013.
Business Area and Corporate Structure
Both Auroactive Pharma and Apitoria Pharma are engaged in the manufacture of active pharmaceutical ingredients. The merger is expected to enhance the competitive positioning of the consolidated entity within the pharmaceutical industry.
The Scheme of Amalgamation is between the wholly owned subsidiaries of Aurobindo Pharma Limited. Consequently, the Company itself is not a direct party to the Scheme, and its shareholding pattern is expected to remain unchanged following the completion of the merger.
Source: BSE
