Dr Reddy's Labs to List in the US

Hyderabad-based pharma major Dr. Reddy's Laboratories today decided to raise up to $200 million through American Depository Shares (ADS), inclusive of the green shoe option.

The company, whose board of directors also declared an interim dividend of 25 percent for 1999-2000, will decide the exact size of the ADS at the time of the issue.

The proceeds from the issue will be used primarily for research and development activities, to undertake clinical trials up to the stage of establishing "clinical proof of concept" for a number of its molecules and to move up the value chain in drug discovery, the company said in a release.

The rest of the amount will be used for investments in other high growth areas including further acquisitions in India and abroad, biotechnology research, domestic finished dosages, generics markets and expansion into new markets like China and Brazil and regulated markets.

The company has formed a committee of directors to look into all details of the ADS, including which exchange the ADS will be listed, the issue managers, depositories and merchant bankers. The company is scheduled to complete the entire issue within six months.

The company will determine the structure of the ADS and the ADS rate in consultation with the appointed merchant bankers. Dr. Reddy's Labs has planned the ADS issue at a time when the receptiveness of the US market to overseas issues is high and the value drivers can give the best returns on investments, the release added.