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Glenmark hits new high, up 6% on CCEA nod to hike FII limit

Shares of Glenmark Pharma hit an all-time high of Rs 901.20, up more than 6 percent in early trade Wednesday on approval from cabinet committee on economic affairs (CCEA) to hike FII limit in company.

April 08, 2015 / 01:42 PM IST
 
 
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Shares of Glenmark Pharma hit an all-time high of Rs 901.20, up more than 6 percent in early trade Wednesday on approval from cabinet committee on economic affairs (CCEA) to hike FII limit in company.

The decision was taken by the CCEA, chaired by Prime Minister Narendra Modi. In February, the Foreign Investment Promotion Board had referred the proposal by the pharma major to the CCEA for clearance as the company exceeded its clearance limit of Rs 1,200 crore.

Mumbai-based Glenmark Pharmaceuticals had sought to raise the cap of foreign institutional investor holding to 49 per cent from present 35.07 percent. The move would facilitate the drug firm's bringing in Rs 2,022 crore of foreign funds into the country.

In Glenmark Pharmaceutical, an official statement said, "The company has increased the foreign investment limit by FIIs from 35.07 percent to 49 percent. This will result in an inflow of about Rs 2,022 crore".

Apart from manufacturing pharmaceuticals, the company is engaged in R&D activities. It is a USD 1 billion Indian pharma company with a global presence that has facilities in India, Europe and South America.

Meanwhile, its subsidiary Glenmark Generics Inc, USA has concluded the pricing investigation by the Texas Attorney General, USA. Under the terms of the agreed settlement, there is no admission of liability, the company said, adding subsidiary will make a payment in 16 equal payments of USD 1.56 million each quarter for the next 16 quarters to the state of texas.

"The settlement amount will not materially impact the organization's cashflow," said Robert Matsuk, President, North America and Global API Business, Glenmark.

Under the settlement agreement, Glenmark must pay the State of Texas a total of USD 11.25 million for the State's general revenue fund. Because the Medicaid program is jointly funded by the State and US taxpayers, the federal government is entitled to a percentage of the settlement proceeds. The federal government's share is also USD 11.25 million. Additionally, the Texas Attorney General's Office will receive USD 2.5 million in attorneys' fees and costs.

At 09:48 hours IST, the scrip of Glenmark Pharma was quoting at Rs 894.30, up Rs 49.90, or 5.91 percent on the BSE.

(With inputs from PTI)

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