Ranit Pharma Merger

Ranit Pharma and its wholly owned subsidiary Calac Pvt. Ltd were merged with Aurobindo Pharma Ltd (APL) in 2002. The merger was approved by the board of directors of APL as well as by Andhra Pradesh High Court. The objectives of the merger were reduction in operation costs and amalgamation of competitive strengths. No exchange of shares was involved in the merger and hence there was no increase in equity of APL.

Ranit Pharma, a group company of Aurobindo Pharma Ltd (APL), and Calac Pvt. Ltd. another company belonging to the same group were merged with the major company Aurobindo Pharma Ltd (APL) in 2002. The merger was approved by the board of directors of APL. Moreover approval for the large scale merger was also obtained from The Andhra Pradesh High Court. Aurobindo Pharma Ltd (APL) is a major player in the pharmaceuticals industry with a value of Rs 1,050-crore and based at Hyderabad, Andhra Pradesh in India. Ranit Pharma and Calac Pvt Ltd. both belonged to the pharmaceutical ingredients industry.
Ranit Pharma had registered a profit of Rs 10.53 crores in the fiscal year 2001-2002. Calac Pvt. Ltd., on the other hand had incurred a loss of Rs 66.98 lacs. At the time of the merger Ranit Pharma had three manufacturing units close to Hyderabad while Calac had one at Cuddalore in Tamil Nadu.

In April 2002, Aurobindo Pharma Ltd had acquired 79% stake in Ranit Pharma. Later the remaining 21% was also acquired by SPL. Calac Pvt. Ltd., on the other hand was a wholly owned subsidiary of Ranit Pharma. Hence the Andhra Pradesh High Court's approval of Ranit's merger with APL automatically allowed the merger with Calac, it being a 100% subsidiary of Ranit.

The merger was carried out with an eye to reduction of operative costs, thereby increasing the operation margins and amalgamating the competitive strengths of the companies. However no exchange of shares were involved in the merger as both Ranit Pharma and Calac Pvt Ltd. were wholly owned subsidiaries. As a result Aurobindo Pharma Ltd did not undergo any increase in equity from the merger.