Tube Investments of India Limited (TII) has been focussing to diversify its business by identifying new growth opportunities and has recently entered into clean mobility, electronics and alternate fuels. In line with our strategy, the Company has identified contract development and manufacturing organization (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 on 13th March 2023 with Mr. 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.
Mr. 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 cr. into this subsidiary in the form of equity and compulsorily convertible preference shares in tranches. Mr. Govindarajan will be investing up to Rs. 15 cr. in equity and compulsorily convertible preference shares in tranches. Subject to the performance and other terms and conditions specified in the agreement, Mr. Govindarajan will be entitled to get up to 25% of the equity for his investment.
Commenting on this new venture, Mr. M.A.M. Arunachalam (also known as Arun Murugappan), Executive Chairman of the Company, said: “TII’s foray in to 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 Mr. N. Govindarajan, a well accomplished professional in the pharmaceutical industry in India.”
Commenting on the partnership with TII, Mr. Govindarajan said: “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.”