ALEMBIC PHARMACEUTICALS LIMITED - NSE

Placement Document

Not for Circulation and Strictly Confidential

Serial Number: ___

ALEMBIC PHARMACEUTICALS LIMITED

Registered and Corporate Office: Alembic Road, Vadodara 390 003, Gujarat, India

Telephone: +91 265 228 0550; Fax: +91 265 228 2506

E-mail: [email protected]; Website: www.alembicpharmacueticals.com; CIN: L24230GJ2010PLC061123

Alembic Pharmaceuticals Limited (our “Company" or the “Issuer”) was originally incorporated on June 16, 2010 as “Alembic Pharma Limited”, a public limited company under the Companies Act,

1956. Thereafter, our Company commenced its business on July 1, 2010, pursuant to a certificate of commencement of business issued to it by the Assistant Registrar of Companies, Gujarat, Dadra and

Nagar Haveli. Subsequently, the name of our Company was changed to “Alembic Pharmaceuticals Limited”, pursuant to a fresh certificate of incorporation consequent upon change of name dated

March 12, 2011, issued by the Assistant Registrar of Companies, Gujarat, Dadra and Nagar Haveli. For details with respect to changes to the name of our Company, see "General Information" on page

179.

Our Company is issuing 80,47,210 Equity Shares (as defined below) at a price of ₹932.00 per Equity Share (the “Issue Price”), including a premium of ₹930.00 per Equity Share, aggregating to

approximately ₹750.00 crore (the “Issue”). For further details, see “Summary of the Issue” on page 29.

THIS ISSUE IS BEING UNDERTAKEN IN RELIANCE UPON CHAPTER VI OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND

DISCLOSURE REQUIREMENTS) REGULATIONS, 2018, AS AMENDED (THE “SEBI REGULATIONS”) AND SECTION 42 OF THE COMPANIES ACT, 2013 AND OTHER

APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND THE RULES MADE THEREUNDER, EACH AS AMENDED (“COMPANIES ACT”)

The equity shares of our Company, of face value of ₹ 2 each (the “Equity Shares”) are listed on BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”, and together with

BSE, the “Stock Exchanges”). The closing price of the outstanding Equity Shares on BSE and NSE as on July 31, 2020 was ₹985.30 and ₹985.05 per Equity Share, respectively. In-principle approvals

under Regulation 28(1)(a) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, for listing of the Equity Shares to be issued

pursuant to the Issue, have been received from BSE and NSE on August 3, 2020. Our Company shall make applications to the Stock Exchanges for obtaining the final listing and trading approvals for

the Equity Shares to be issued pursuant to the Issue. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reports contained herein. Admission

of the Equity Shares to be issued pursuant to the Issue for trading on the Stock Exchanges should not be taken as an indication of the merits of our Company or of the Equity Shares.

OUR COMPANY HAS PREPARED THIS PLACEMENT DOCUMENT SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE ISSUE.

A copy of the Preliminary Placement Document (which includes disclosures prescribed under Form PAS-4 (as defined hereafter)) has been delivered to the Stock Exchanges and a copy of this Placement

Document (which includes disclosures prescribed under Form PAS-4) has been delivered to the Stock Exchanges. Our Company shall also make requisite filings with the Registrar of Companies,

Gujarat at Ahmedabad (“RoC”), within the stipulated timeframe prescribed under the Companies Act and the Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended. The

Preliminary Placement Document and this Placement Document has not been reviewed by SEBI, the Stock Exchanges, RoC or any other regulatory or listing authority and is intended only for use by

Eligible QIBs (as defined hereinafter). The Preliminary Placement Document and this Placement Document has not been and will not be filed as a prospectus with the RoC, will not be circulated or

distributed to the public in India or any other jurisdiction, and will not constitute a public offer in India or any other jurisdiction.

THE ISSUE AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING DONE IN RELIANCE UPON SECTION 42 OF THE COMPANIES ACT, AND OTHER

APPLICABLE PROVISIONS OF THE COMPANIES ACT AND THE RULES MADE THEREUNDER AND CHAPTER VI OF THE SEBI REGULATIONS. THIS PLACEMENT

DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR. THE ISSUE DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER TO

THE PUBLIC OR TO ANY OTHER PROSPECTIVE INVESTOR OR CLASS OR CATEGORY OF INVESTORS WITHIN OR OUTSIDE INDIA OTHER THAN ELIGIBLE QIBs. THIS

PLACEMENT DOCUMENT SHALL BE CIRCULATED ONLY TO SUCH ELIGIBLE QIBs WHOSE NAMES ARE RECORDED BY OUR COMPANY PRIOR TO MAKING AN

INVITATION TO SUBSCRIBE TO THE EQUITY SHARES.

YOU MAY NOT AND ARE NOT AUTHORISED TO (1) DELIVER THIS PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE THIS PLACEMENT

DOCUMENT IN ANY MANNER WHATSOEVER; OR (3) RELEASE ANY PUBLIC ADVERTISEMENT OR UTILISE ANY MEDIA, MARKETING OR DISTRIBUTION CHANNELS

OR AGENTS TO INFORM THE PUBLIC AT LARGE ABOUT THE ISSUE. ANY DISTRIBUTION OR REPRODUCTION OF THIS PLACEMENT DOCUMENT IN WHOLE OR IN

PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN VIOLATION OF THE SEBI REGULATIONS OR OTHER APPLICABLE LAWS

OF INDIA AND OF OTHER JURISDICTIONS.

INVESTMENTS IN EQUITY SHARES INVOLVE A HIGH DEGREE OF RISK AND PROSPECTIVE INVESTORS SHOULD NOT INVEST IN THE ISSUE UNLESS THEY ARE

PREPARED TO TAKE THE RISK OF LOSING ALL OR PART OF THEIR INVESTMENT. PROSPECTIVE INVESTORS ARE ADVISED TO CAREFULLY READ THE SECTION

“RISK FACTORS” BEGINNING ON PAGE 35 BEFORE MAKING AN INVESTMENT DECISION RELATING TO THE ISSUE. EACH PROSPECTIVE INVESTOR IS ADVISED TO

CONSULT ITS OWN ADVISORS ABOUT THE PARTICULAR CONSEQUENCES OF AN INVESTMENT IN THE EQUITY SHARES TO BE ISSUED PURSUANT TO THE

PRELIMINARY PLACEMENT DOCUMENT AND THIS PLACEMENT DOCUMENT. PROSPECTIVE INVESTORS OF THE EQUITY SHARES OFFERED SHOULD CONDUCT

THEIR OWN DUE DILIGENCE ON THE EQUITY SHARES. IF YOU DO NOT UNDERSTAND THE CONTENTS OF THIS PLACEMENT DOCUMENT, YOU SHOULD CONSULT

AN AUTHORISED FINANCIAL ADVISOR.

Invitations, offers and sales of Equity Shares to be issued pursuant to the Issue shall only be made pursuant to the Preliminary Placement Document (as defined hereinafter) and this Placement Document

(as defined hereinafter) and the Confirmation of Allocation Note (as defined hereinafter). For further details, see “Issue Procedure” on page 131. The distribution of this Placement Document or the

disclosure of its contents, without our Company’s prior consent, to any person, other than Eligible QIBs and persons retained by Eligible QIBs to advise them with respect to their purchase of Equity

Shares, is unauthorised and prohibited. Each prospective investor, by accepting delivery of this Placement Document, agrees to observe the foregoing restrictions and to make no copies of this Placement

Document or any documents referred to in this Placement Document.

The Equity Shares offered in the Issue have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the

United States and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and

any applicable state securities laws. The Equity Shares offered in the Issue are being offered and sold only outside the United States in “offshore transactions”, as defined in and in reliance on Regulation

S under the U.S. Securities Act (“Regulation S”) and the applicable laws of the jurisdiction where those offers and sales are made. See “Selling Restrictions” on page 145 for information about eligible

offerees for the Issue and “Purchaser Representations and Transfer Restrictions” on page 152 for information about transfer restrictions that apply to the Equity Shares sold in the Issue.

The information on our Company’s website or any website directly or indirectly linked to our Company’s website or the website of the BRLMs (as defined hereinafter) or any of their respective affiliates

does not constitute nor form part of this Placement Document and prospective investors should not rely on such information contained in, or available through, any such websites for their investment in

this Issue.

This Placement Document is dated August 6, 2020.

BOOK RUNNING LEAD MANAGERS

Monarch Networth Capital Limited HDFC Bank Limited

TABLE OF CONTENTS

NOTICE TO INVESTORS .................................................................................................................................. 1

REPRESENTATIONS BY INVESTORS........................................................................................................... 3

OFFSHORE DERIVATIVE INSTRUMENTS .................................................................................................. 9

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES .......................................................................... 10

PRESENTATION OF FINANCIAL AND OTHER INFORMATION ......................................................... 11

INDUSTRY AND MARKET DATA................................................................................................................. 13

FORWARD-LOOKING STATEMENTS ........................................................................................................ 14

ENFORCEMENT OF CIVIL LIABILITIES .................................................................................................. 15

EXCHANGE RATES INFORMATION .......................................................................................................... 16

DEFINITIONS AND ABBREVIATIONS ........................................................................................................ 17

SUMMARY OF BUSINESS .............................................................................................................................. 23

SUMMARY OF THE ISSUE ............................................................................................................................ 29

SELECTED FINANCIAL INFORMATION ................................................................................................... 31

RISK FACTORS ................................................................................................................................................ 35

MARKET PRICE INFORMATION ................................................................................................................ 63

USE OF PROCEEDS ......................................................................................................................................... 66

CAPITALISATION STATEMENT ................................................................................................................. 67

CAPITAL STRUCTURE ................................................................................................................................... 68

RELATED PARTY TRANSACTIONS ............................................................................................................ 71

DIVIDENDS ........................................................................................................................................................ 72

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS .................................................................................................................................................... 73

INDUSTRY OVERVIEW .................................................................................................................................. 93

OUR BUSINESS ............................................................................................................................................... 106

ORGANISATIONAL STRUCTURE ............................................................................................................. 117

BOARD OF DIRECTORS AND SENIOR MANAGEMENT ...................................................................... 118

PRINCIPAL SHAREHOLDERS AND OTHER INFORMATION ............................................................ 128

ISSUE PROCEDURE ...................................................................................................................................... 131

PLACEMENT ................................................................................................................................................... 143

SELLING RESTRICTIONS ........................................................................................................................... 145

PURCHASER REPRESENTATIONS AND TRANSFER RESTRICTIONS ............................................ 152

THE SECURITIES MARKET OF INDIA..................................................................................................... 154

DESCRIPTION OF THE EQUITY SHARES ............................................................................................... 157

STATEMENT OF SPECIAL TAX BENEFITS ............................................................................................ 161

LEGAL PROCEEDINGS ................................................................................................................................ 174

OUR STATUTORY AUDITORS.................................................................................................................... 178

GENERAL INFORMATION .......................................................................................................................... 179

FINANCIAL STATEMENTS ......................................................................................................................... 180

MATERIAL DEVELOPMENTS .................................................................................................................... 181

DECLARATION .............................................................................................................................................. 189

APPLICATION FORM ................................................................................................................................... 192

1

NOTICE TO INVESTORS

Our Company has furnished and accepts full responsibility for all the information contained in this Placement

Document and confirms that, to the best of our knowledge and belief, having made all reasonable enquiries, this

Placement Document contains all the information with respect to us, which is material in the context of the Issue.

The statements contained in this Placement Document relating to us and the Equity Shares are, in all material

respects, true, accurate and not misleading. The opinions and intentions expressed in this Placement Document

with regard to us and the Equity Shares, are honestly held, have been reached after considering all relevant

circumstances, and are based on information currently available with us and are based on reasonable assumptions.

There are no other facts in relation to us or the Equity Shares, the omission of which would, in the context of the

Issue, make any statement in this Placement Document misleading in any material respect. Further, all reasonable

enquiries have been made by us to ascertain such facts and to verify the accuracy of all such information and

statements. The information contained in this Placement Document has been provided by our Company and other

sources identified herein. Distribution of this Placement Document to any person other than the prospective

investor specified by the BRLMs or their representatives, and those persons, if any, retained to advise such

prospective investor with respect thereto, is unauthorised, and any disclosure of its contents, without prior written

consent of our Company, is prohibited. Any reproduction or distribution of this Placement Document, in whole

or in part, and any disclosure of its contents to any other person is prohibited.

Monarch Networth Capital Limited and HDFC Bank Limited (together, the “BRLMs”), have made reasonable

enquiries but have not separately verified all of the information contained in the Preliminary Placement Document

or this Placement Document (financial, legal or otherwise). Accordingly, neither the BRLMs nor any of their

affiliates including any of their respective shareholders, directors, officers, employees, counsel, representatives,

agents or affiliates make any express or implied representation, warranty or undertaking, and no responsibility or

liability is accepted by any of the BRLMs or any of their respective shareholders, directors, officers, employees,

counsel, representatives, agents or affiliates as to the accuracy or completeness of the information contained in

the Preliminary Placement Document or this Placement Document or any other information supplied in connection

with the issue of Equity Shares or their distribution.

Each person receiving this Placement Document acknowledges that such person has not relied on the BRLMs or

any of their affiliates including any of their respective shareholders, directors, officers, employees, counsel,

representatives, agents or affiliates in connection with such person’s investigation of the accuracy of such

information or such person’s investment decision, and each such person must rely on its own examination of us

and the merits and risks involved in investing in the Equity Shares to be issued pursuant to the Issue. Prospective

investors should not construe the contents of this Placement Document as legal, tax, accounting or investment

advice.

No person is authorised to give any information or to make any representation not contained in this Placement

Document and any information or representation not so contained must not be relied upon as having been

authorised by or on behalf of our Company or by or on behalf of the BRLMs. The delivery of this Placement

Document at any time does not imply that the information contained in it is correct as of any time subsequent to

its date.

The Equity Shares to be issued pursuant to the Issue have not been approved, disapproved or recommended

by the U.S. Securities and Exchange Commission, any other federal or state authorities in the United States

or the securities authorities of any non-United States jurisdiction or any other United States or non-United

States regulatory authority. No authority has passed on or endorsed the merits of the Issue or the accuracy

or adequacy of this Placement Document. Any representation to the contrary is a criminal offence in the

United States and may be a criminal offence in other jurisdictions.

The Equity Shares have not been and will not be registered under the U.S. Securities Act, or the securities laws

of any state of the United States and, unless so registered, may not be offered or sold within the United States,

except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S.

Securities Act and applicable U.S. state securities laws. For further information, see “Selling Restrictions” and

“Purchaser Representations and Transfer Restrictions” beginning on pages 145 and 152, respectively.

The subscribers of the Equity Shares offered in the Issue will be deemed to make the representations, warranties,

acknowledgments and agreements set forth in “Notice to Investors”, “Representations by Investors”, “Selling

Restrictions” and “Purchaser Representations and Transfer Restrictions” on pages 1, 3, 145 and 152,

respectively.

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The distribution of this Placement Document may be restricted in certain jurisdictions by applicable laws. As

such, this Placement Document does not constitute, and may not be used for or in connection with, an offer or

solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to

whom it is unlawful to make such offer or solicitation. In particular, except for India, no action has been taken by

our Company and the BRLMs that would permit an offering of the Equity Shares or distribution of this Placement

Document in any jurisdiction, where action for that purpose is required. Accordingly, the Equity Shares may not

be offered or sold, directly or indirectly, and none of the Preliminary Placement Document, this Placement

Document or any offering material in connection with the Equity Shares may be distributed or published in or

from any country or jurisdiction, except under circumstances that will result in compliance with any applicable

rules and regulations of any such country or jurisdiction. For a description of the restrictions applicable to the

offer and sale of the Equity Shares in the Issue in certain jurisdictions, see “Selling Restrictions” and “Purchaser

Representations and Transfer Restrictions” beginning on pages 145 and 152, respectively.

In making an investment decision, the prospective investors must rely on their own examination of us, the Equity

Shares and the terms of the Issue, including the merits and risks involved. Prospective investors should not

construe the contents of this Placement Document as legal, tax, accounting or investment advice. Prospective

investors should consult their own counsel and advisors as to business, legal, tax, accounting and related matters

concerning the Issue. In addition, our Company or the BRLMs are not making any representation to any offeree

or subscriber of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or

subscriber under applicable legal, investment or similar laws or regulations.

Each subscriber of the Equity Shares in the Issue is deemed to have acknowledged, represented and agreed that it

is an Eligible QIB and is eligible to invest in India and in our Company under applicable law, including Chapter

VI of the SEBI Regulations, Section 42 of the Companies Act and other provisions of the Companies Act, and

that it is not prohibited by SEBI or any other regulatory, statutory or judicial authority from buying, selling or

dealing in securities including the Equity Shares. Each subscriber of the Equity Shares in the Issue also

acknowledges that it has been afforded an opportunity to request from our Company and review information

relating to our Company and the Equity Shares.

This Placement Document contains summaries of certain terms of certain documents, which summaries are

qualified in their entirety by the terms and conditions of such document.

The information on our Company’s website, www.alembicpharmaceuticals.com, any website directly or indirectly

linked to the website of our Company or on the website of the BRLMs or any their respective affiliates, does not

constitute nor form part of the Preliminary Placement Document or this Placement Document. Prospective

investors should not rely on such information contained in, or available through, any such websites.

NOTICE TO INVESTORS IN CERTAIN OTHER JURISDICTIONS

For information to investors in certain other jurisdictions, see the sections “Selling Restrictions” and “Purchaser

Representations and Transfer Restrictions” on pages 145 and 152, respectively.

3

REPRESENTATIONS BY INVESTORS

References herein to “you” or “your” is to a prospective investor in the Issue. By Bidding for and/or subscribing

to any Equity Shares in the Issue, you are deemed to have represented, warranted, acknowledged and agreed to

our Company and the BRLMs, as follows:

• You are a “qualified institutional buyer” as defined in Regulation 2(1)(ss) of the SEBI Regulations and not

excluded pursuant to Regulation 179(2)(b) of the SEBI Regulations, having a valid and existing registration

under applicable laws and regulations India, and undertake to (i) acquire, hold, manage or dispose of any

Equity Shares that are Allotted (hereinafter defined) to you in accordance with Chapter VI of the SEBI

Regulations, the Companies Act and all other applicable laws; and (ii) comply with all requirements under

applicable law in this relation, including reporting obligations / making necessary filings with appropriate

regulatory authorities including RBI, in connection with this Issue or otherwise in relation to accessing the

capital markets;

• You are eligible to invest in India under applicable law, including the FEMA Rules, and have not been

prohibited by SEBI or any other regulatory authority, statutory authority or otherwise, from buying, selling,

or dealing in securities or otherwise accessing capital markets in India;

• If you are not a resident of India, but a QIB, you are an Eligible FPI, having a valid and existing registration

with SEBI under the applicable laws in India or a multilateral or bilateral development financial institution,

and are eligible to invest in India under applicable law, including the FEMA Rules, and any notifications,

circulars or clarifications issued thereunder, and have not been prohibited by SEBI or any other regulatory

authority, from buying, selling, dealing in securities or otherwise accessing the capital markets. You

confirm that you are not an FVCI;

• You will provide the information as required under the Companies Act, the PAS Rules and applicable SEBI

regulations and rules for record keeping by our Company, including your name, complete address, phone

number, e-mail address, permanent account number and bank account details;

• If you are Allotted Equity Shares, you shall not, for a period of one year from the date of Allotment, sell

the Equity Shares so acquired except on the Stock Exchanges. Further, additional restrictions are applicable

if you are within the United States. For further details in this regard, see “Selling Restrictions” and

“Purchaser Representations and Transfer Restrictions” on pages 145 and 152;

• You are aware that neither the Preliminary Placement Document nor this Placement Document have been

and will be filed as a prospectus under the Companies Act, the SEBI Regulations or under any other law in

force in India and, no Equity Shares will be offered in India or overseas to the public or any members of

the public in India or any other class of investors, other than Eligible QIBs. The Preliminary Placement

Document and this Placement Document (which includes disclosures prescribed under Form PAS-4) has

not been and will not be reviewed or affirmed by the RBI, SEBI, the Stock Exchanges, the RoC or any

other regulatory or listing authority and is intended only for use by Eligible QIBs;

• The Preliminary Placement Document and this Placement Document has been filed with the Stock

Exchanges and the Preliminary Placement Document and this Placement Document has been displayed on

the websites of our Company and the Stock Exchanges;

• You are permitted to subscribe for and acquire the Equity Shares under the laws of all relevant jurisdictions

that apply to you and that you have fully observed such laws and you have necessary capacity, have

obtained all necessary consents, governmental or otherwise, and authorisations and complied and shall

comply with all necessary formalities, to enable you to participate in the Issue and to perform your

obligations in relation thereto (including, without limitation, in the case of any person on whose behalf you

are acting, all necessary consents and authorisations to agree to the terms set out or referred to in the

Preliminary Placement Document and the Placement Document), and will honour such obligations;

• You are aware that, our Company, the BRLMs or any of their respective shareholders, directors, officers,

employees, counsel, representatives, agents or affiliates are not making any recommendations to you or

advising you regarding the suitability of any transactions it may enter into in connection with the Issue and

your participation in the Issue is on the basis that you are not, and will not, up to the Allotment, be a client

of the BRLMs. The BRLMs or any of their shareholders, directors, officers, employees, counsel,

4

representatives, agents or affiliates do not have any duties or responsibilities to you for providing the

protection afforded to their clients or customers or for providing advice in relation to the Issue and are not

in any way acting in any fiduciary capacity;

• You confirm that, either: (i) you have not participated in or attended any investor meetings or presentations

by our Company or its agents (the “Company Presentations”) with regard to our Company or the Issue;

or (ii) if you have participated in or attended any Company Presentations: (a) you understand and

acknowledge that the BRLMs may not have knowledge of the statements that our Company or its agents

may have made at such Company Presentations and is therefore unable to determine whether the

information provided to you at such Company Presentations may have included any material misstatements

or omissions, and, accordingly you acknowledge that the BRLMs have advised you not to rely in any way

on any information that was provided to you at such Company Presentations, and (b) confirm that you have

not been provided any material or price sensitive information relating to our Company and the Issue that

was not publicly available;

• Your decision to subscribe to the Equity Shares to be issued pursuant to the Issue has not been made on the

basis of any information relating to us, which is not set forth in the Preliminary Placement Document or

this Placement Document;

• You are subscribing to the Equity Shares to be issued pursuant to the Issue in accordance with applicable

laws and by participating in this Issue, you are not in violation of any applicable law, including but not

limited to the SEBI Insider Trading Regulations, the Securities and Exchange Board of India (Prohibition

of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003, as amended,

and the Companies Act;

• All statements other than statements of historical fact included in this Placement Document, including,

without limitation, those regarding us or our business strategy, plans and objectives of management for

future operations (including development plans and objectives relating to our business), are forward-

looking statements. You are aware that, such forward-looking statements involve known and unknown

risks, uncertainties and other important factors that could cause actual results to be materially different

from future results, performance or achievements expressed or implied by such forward-looking

statements. Such forward-looking statements are based on numerous assumptions regarding our present

and future business strategies and environment in which we will operate in the future. You should not place

undue reliance on forward-looking statements, which speak only as at the date of this Placement Document.

Neither our Company nor the BRLMs or any of their respective shareholders, directors, officers,

employees, counsel, representatives, agents or affiliates assume any responsibility to update any of the

forward-looking statements contained in this Placement Document;

• You are aware and understand that the Equity Shares are being offered only to Eligible QIBs on a private

placement basis and are not being offered to the general public, and the Allotment of the same shall be at

the discretion of our Company, in consultation with the BRLMs;

• You are aware that in terms of the requirements of the Companies Act, upon Allocation, our Company has

disclosed names and percentage of post-Issue shareholding of the proposed Allottees in this Placement

Document. However, disclosure of such details in relation to the proposed Allottees in this Placement

Document does not guarantee Allotment to them, as Allotment in the Issue shall continue to be at the sole

discretion of our Company, in consultation with the BRLMs;

• You are aware that if you are Allotted more than 5% of the Equity Shares in the Issue, our Company shall

be required to disclose your name and the number of the Equity Shares Allotted to you to the Stock

Exchanges and the Stock Exchanges will make the same available on their website and you consent to such

disclosures;

• You have been provided a serially numbered copy of the Preliminary Placement Document and this

Placement Document and have read it in its entirety, including in particular, “Risk Factors” on page 35;

• In making your investment decision, you have (i) relied on your own examination of us, the Equity Shares

and the terms of the Issue, including the merits and risks involved, (ii) made your own assessment of us,

the Equity Shares and the terms of the Issue, based solely on and in reliance of the information contained

in the Preliminary Placement Document and no other disclosure or representation by our Company or any

5

other party, (iii) consulted your own independent counsel and advisors or otherwise have satisfied yourself

concerning, without limitation, the effects of local laws (including tax laws), (iv) received all information

that you believe is necessary or appropriate in order to make an investment decision in respect of us and

the Equity Shares, and (v) relied upon your own investigation and resources in deciding to invest in the

Issue;

• Neither the Company nor the BRLMs nor any of their respective shareholders, directors, officers,

employees, counsel, representatives, agents or affiliates have provided you with any tax advice or otherwise

made any representations regarding the tax consequences of purchase, ownership and disposal of the Equity

Shares (including but not limited to the Issue and the use of the proceeds from the Equity Shares). You will

obtain your own independent tax advice from a reputable service provider and will not rely on the BRLMs

or any of their shareholders, directors, officers, employees, counsel, representatives, agents or affiliates,

when evaluating the tax consequences in relation to the Equity Shares (including, in relation to the Issue

and the use of proceeds from the Equity Shares). You waive, and agree not to assert any claim against, our

Company, the BRLMs or any of their respective shareholders, directors, officers, employees, counsel,

representatives, agents or affiliates, with respect to the tax aspects of the Equity Shares or as a result of any

tax audits by tax authorities, wherever situated;

• You will obtain your own independent tax advice from a reputable service provider and will not rely on the

BRLMs or any of their shareholders, directors, officers, employees, counsel, representatives, agents or

affiliates when evaluating the tax consequences in relation to the Equity Shares (including but not limited

to the Issue and the use of the proceeds from the Equity Shares). You waive, and agree not to assert any

claim against our Company or any of the BRLMs or any of their respective shareholders, directors, officers,

employees, counsel, representatives, agents or affiliates with respect to the tax aspects of the Equity Shares

or as a result of any tax audits by tax authorities, wherever situated;

• You are a sophisticated investor and have such knowledge and experience in financial, business and

investment matters as to be capable of evaluating the merits and risks of an investment in the Equity Shares.

You are experienced in investing in private placement transactions of securities of companies in a similar

nature of business, similar stage of development and in similar jurisdictions. You and any accounts for

which you are subscribing for the Equity Shares (i) are each able to bear the economic risk of your

investment in the Equity Shares, (ii) will not look to our Company and/or the BRLMs or any of their

respective shareholders, directors, officers, employees, counsel, advisors, representatives, agents or

affiliates for all or part of any such loss or losses that may be suffered in connection with the Issue, including

losses arising out of non-performance by our Company of any of its respective obligations or any breach

of any representations and warranties by our Company, whether to you or otherwise, (iii) are able to sustain

a complete loss on the investment in the Equity Shares, (iv) have no need for liquidity with respect to the

investment in the Equity Shares, (v) have no reason to anticipate any change in your or their circumstances,

financial or otherwise, which may cause or require any sale or distribution by you or them of all or any part

of the Equity Shares; and (vi) are seeking to subscribe to the Equity Shares in the Issue for your own

investment and not with a view to resell or distribute. You are aware that investment in Equity Shares

involves a high degree of risk and that the Equity Shares are therefore, a speculative investment;

• If you are acquiring the Equity Shares to be issued pursuant to this Issue for one or more managed accounts,

you represent and warrant that you are authorised in writing, by each such managed account to acquire such

Equity Shares for each managed account and hereby make the representations, warranties,

acknowledgements, undertakings and agreements herein for and on behalf of each such account, reading

the reference to “you” to include such accounts;

• You are not a ‘promoter’ of our Company as defined under Section 2(69) of the Companies Act and the

SEBI Regulations, and are not a person related to any of our Promoters, either directly or indirectly and

your Bid does not directly or indirectly represent any of our Promoters or members of our Promoter Group

or persons or entities related thereto;

• You have no rights under a shareholders’ agreement or voting agreement with our Promoters or members

of the Promoter Group, no veto rights or right to appoint any nominee director on our Board, other than the

rights acquired, if any, in the capacity of a lender not holding any Equity Shares;

• You agree in terms of Section 42 of the Companies Act and Rule 14 of the PAS Rules, that our Company

shall make necessary filings with the RoC as may be required under the Companies Act;

6

• You have no right to withdraw your Bid or revise your Bid downwards after the Bid/ Issue Closing Date

(as defined hereinafter);

• You are eligible to Bid for and hold the Equity Shares so Allotted, together with any Equity Shares held by

you prior to the Issue. Further, you confirm that your aggregate holding after the Allotment of the Equity

Shares shall not exceed the level permissible as per any applicable regulation;

• The Bid made by you would not result in triggering an open offer under the SEBI Takeover Regulations;

• The number of Equity Shares Allotted to you under the Issue, together with other Allottees that belong to

the same group or are under common control as you, pursuant to the Allotment under the Issue shall not

exceed 50% of the Issue. For the purposes of this representation:

(a) Eligible QIBs “belonging to the same group” shall mean entities where (a) any of them controls,

directly or indirectly, through its subsidiary or holding company, not less than 15% of the voting

rights in the other; (b) any of them, directly or indirectly, by itself, or in combination with other

persons, exercise control over the others; or (c) there is a common director, excluding nominee and

independent directors, amongst an Eligible QIB, its subsidiary or holding company and any other

Eligible QIB; and

(b) ‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the SEBI

Takeover Regulations;

• You shall not undertake any trade in the Equity Shares credited to your beneficiary account until such time

that the final listing and trading approvals for such Equity Shares to be issued pursuant to this Issue, are

issued by the Stock Exchanges;

• You are aware that (i) applications for in-principle approval, in terms of Regulation 28(1)(a) of the SEBI

Listing Regulations, for listing and admission of the Equity Shares to be issued pursuant to the Issue and

for trading on the Stock Exchanges, were made and an in-principle approval has been received by our

Company from each of the Stock Exchanges, and (ii) the application for the final listing and trading

approval will be made only after Allotment. There can be no assurance that the final listing and trading

approvals for listing of the Equity Shares, to be issued pursuant to this Issue, will be obtained in time or at

all. Neither our Company nor the BRLMs nor any of their respective shareholders, directors, officers,

employees, counsel, representatives, agents or affiliates shall be responsible for any delay or non-receipt

of such final listing and trading approvals or any loss arising from such delay or non-receipt;

• You are aware and understand that the BRLMs have entered into a Placement Agreement with our

Company whereby the BRLMs have, subject to the satisfaction of certain conditions set out therein,

undertaken to use their reasonable efforts to procure subscription for the Equity Shares on the terms and

conditions set forth therein;

• The contents of the Preliminary Placement Document and this Placement Document are exclusively the

responsibility of our Company, and that neither the BRLMs nor any person acting on its behalf or any of

the counsel or advisors to the Issue has or shall have any liability for any information, representation or

statement contained in the Preliminary Placement Document or this Placement Document or any

information previously published by or on behalf of our Company and will not be liable for your decision

to participate in the Issue based on any information, representation or statement contained in the

Preliminary Placement Document or this Placement Document or otherwise. By accepting a participation

in the Issue, you agree to the same and confirm that the only information you are entitled to rely on, and on

which you have relied in committing yourself to acquire the Equity Shares is contained in this Placement

Document, such information being all that you deem necessary to make an investment decision in respect

of the Equity Shares, you have neither received nor relied on any other information, representation,

warranty or statement made by or on behalf of the BRLMs or our Company or any other person, and the

BRLMs or our Company or any of their respective affiliates, including any view, statement, opinion or

representation expressed in any research published or distributed by them, the BRLMs and their affiliates

will not be liable for your decision to accept an invitation to participate in the Issue based on any other

information, representation, warranty, statement or opinion;

7

• You understand that the BRLMs or any of their shareholders, directors, officers, employees, counsel,

representatives, agents or affiliates do not have any obligation to purchase or acquire all or any part of the

Equity Shares purchased by you in the Issue or to support any losses directly or indirectly sustained or

incurred by you for any reason whatsoever in connection with the Issue, including the non-performance by

our Company or any of its obligations or any breach of any representations or warranties by us, whether to

you or otherwise;

• You are able to purchase the Equity Shares in accordance with the restrictions described in “Selling

Restrictions” on page 145 and you have made, or are deemed to have made, as applicable, the

representations, warranties, acknowledgements, undertakings and agreements in “Selling Restrictions” on

page 145;

• You understand and agree that the Equity Shares are transferable only in accordance with the restrictions

described in “Purchaser Representations and Transfer Restrictions” and you have made, or are deemed to

have made, as applicable, the representations, warranties, acknowledgements, undertakings and agreements

in “Purchaser Representations and Transfer Restrictions” on page 152;

• You understand that the Equity Shares have not been and will not be registered under the U.S. Securities

Act or registered, listed or otherwise qualified in any other jurisdictions outside India and may not be

offered or sold within the United States except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the U.S. Securities Act. For further information, see “Selling

Restrictions” on page 145;

• If you are outside the United States, you are purchasing the Equity Shares in an "offshore transaction"

within the meaning of Regulation S under the U.S. Securities Act, and are not our Company’s or the

BRLMs’ affiliate or a person acting on behalf of such an affiliate;

• You are not acquiring or subscribing for the Equity Shares as a result of any general solicitation or general

advertising (as those terms are defined in Regulation D under the Securities Act) or “directed selling

efforts” (as defined in Regulation S).

• You agree that any dispute arising in connection with the Issue will be governed by and construed in

accordance with the laws of Republic of India, and the courts in Mumbai, India shall have exclusive

jurisdiction to settle any disputes which may arise out of or in connection with the Preliminary Placement

Document and this Placement Document.

• Each of the representations, warranties, acknowledgements and agreements set out above shall continue to

be true and accurate at all times up to and including the Allotment, listing and trading of the Equity Shares

in the Issue;

• You agree to indemnify and hold our Company, the BRLMs and their respective directors, officers,

employees, affiliates, associates, controlling persons and representatives harmless from any and all costs,

claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any

breach of the foregoing representations, warranties, acknowledgements and undertakings made by you in

the Preliminary Placement Document and in this Placement Document. You agree that the indemnity set

out in this paragraph shall survive the resale of the Equity Shares by, or on behalf of, the managed accounts;

• You acknowledge that the Preliminary Placement Document did not, and this Placement Document shall

not confer upon or provide you with any right of renunciation of the Equity Shares offered through the

Issue in favour of any person;

• You will make the payment for subscription to the Equity Shares pursuant to this Issue from your own bank

account. In case of joint holders, the monies shall be paid from the bank account of the person whose name

appears first in the application;

• You are aware that in terms of the SEBI FPI Regulations and the FEMA Rules, the total holding by each

FPI including its investor group (which means multiple entities registered as FPIs and directly or indirectly

having common ownership of more than fifty percent or common control) shall be below 10% of the total

paid-up Equity Share capital of our Company on a fully diluted basis. In terms of the FEMA Rules, for

8

calculating the aggregate holding of FPIs in a company, holding of all registered FPIs shall be included.

The existing individual and aggregate investment limits for an FPI in our Company are 10% of the total

paid-up Equity Share capital of our Company on a fully diluted basis and the sectoral cap applicable to our

Company in accordance with the FEMA Rules, respectively. Hence, Eligible FPIs may invest in such

number of Equity Shares in this Issue such that the individual investment of the FPI in our Company shall

be less than 10% of the post-Issue paid-up Equity Share capital of our Company on a fully diluted basis. In

case the holding of an FPI together with its investor group increases to 10% or more of the total paid-up

Equity Share capital, on a fully diluted basis, such FPI together with its investor group shall divest the

excess holding within a period of five trading days from the date of settlement of the trades resulting in the

breach. If however, such excess holding has not been divested within the specified period of five trading

days, the entire shareholding of such FPI together with its investor group will be re-classified as FDI,

subject to the conditions as specified by SEBI and the RBI in this regard and compliance by our Company

and the investor with applicable reporting requirements and the FPI and its investor group will be prohibited

from making any further portfolio investment in our Company under the SEBI FPI Regulations;

• You confirm that neither is your investment as an entity of a country which shares land border with India

nor is the beneficial owner of your investment situated in or a citizen of such country (in each which case,

investment can only be through the Government approval route), and that your investment is in accordance

with press note no. 3 (2020 Series), dated April 17, 2020, issued by the Department for Promotion of

Industry and Internal Trade, Government of India, and Rule 6 of the FEMA Rules;

• You are aware and understand that you are allowed to place a Bid for Equity Shares. Please note that

submitting a Bid for Equity Shares should not be taken to be indicative of the number of Equity Shares that

will be Allotted to a successful Bidder. Allotment of Equity Shares will be undertaken by our Company, in

its absolute discretion, in consultation with the BRLMs.

• Our Company, the BRLMs, their respective affiliates, directors, officers, employees, controlling persons

and others will rely on the truth and accuracy of the foregoing representations, warranties,

acknowledgements and undertakings, and are irrevocable. It is agreed that if any of such representations,

warranties, acknowledgements and undertakings are no longer accurate, you will promptly notify our

Company and the BRLMs; and

• You will make all necessary filings with appropriate regulatory authorities, including the RBI, as required

pursuant to applicable laws.

9

OFFSHORE DERIVATIVE INSTRUMENTS

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of

Regulation 21 of the SEBI FPI Regulations, an Eligible FPI including affiliates of the BRLMs, which is registered

as a Category I FPI, may issue, subscribe to or otherwise deal in offshore derivative instruments (as defined under

the SEBI FPI Regulations as any instrument, by whatever name called, which is issued overseas by a FPI against

securities held by it in India, as its underlying, and all such offshore derivative instruments are referred to herein

as “P-Notes”), for which they may receive compensation from the purchasers of such instruments. In terms of

Regulation 21 of SEBI FPI Regulations, P-Notes may be issued only by such persons who are registered as

Category I FPIs and they may be issued only to persons eligible for registration as Category I FPIs, subject to

exceptions provided in the SEBI FPI Regulations and compliance with ‘know your client’ requirements, as

specified by SEBI and subject to compliance with such other conditions as may be specified from the SEBI. An

Eligible FPI shall also ensure that no transfer of any instrument referred to above is made to any person unless

such FPIs are registered as Category I FPIs and such instrument is being transferred only to person eligible for

registration as Category I FPIs subject to requisite consents being obtained in terms of Regulation 21 of SEBI FPI

Regulations. P-Notes have not been and are not being offered or sold pursuant to this Placement Document. This

Placement Document does not contain any information concerning P-Notes or the issuer(s) of any P-Notes,

including any information regarding any risk factors relating thereto.

Subject to certain relaxations provided under Regulation 22(4) of the SEBI FPI Regulations, investment by a

single FPI including its investor group (multiple entities registered as FPIs and directly or indirectly, having

common ownership of more than 50% or common control,) is not permitted to be 10% or above of our post-Issue

Equity Share capital on a fully diluted basis (“Investment Restrictions”). The SEBI has, vide a circular dated

November 5, 2019, issued the operational guidelines for FPIs, designated depository participants and eligible

foreign investors (the “FPI Operational Guidelines”), to facilitate implementation of the SEBI FPI Regulations.

In terms of such FPI Operational Guidelines, the Investment Restrictions shall also apply to subscribers of P-

Notes and two or more subscribers of P-Notes having common ownership, directly or indirectly, of more than

50% or common control shall be considered together as a single subscriber of the P-Notes. Further, in the event a

prospective investor has investments as an FPI and as a subscriber of P-Notes, the Investment Restrictions shall

apply on the aggregate of the FPI investments and P-Notes positions held in the underlying company.

Further, in accordance with Press Note No. 3 (2020 Series), dated April 17, 2020, issued by the Department for

Promotion of Industry and Internal Trade, Government of India, investments where the entity is of a country

which shares land border with India or where the beneficial owner of the Equity Shares is situated in or is a citizen

of a country which shares land border with India, can only be made through the Government approval route, as

prescribed in the Consolidated FDI Policy dated August 28, 2017. These investment restrictions shall also apply

to subscribers of P-Notes.

Affiliates of the BRLMs which are Eligible FPIs may purchase, to the extent permissible under law, the Equity

Shares in the Issue, and may issue P-Notes in respect thereof. Any P-Notes that may be issued are not securities

of our Company and do not constitute any obligation of, claims on or interests in our Company. Our Company

has not participated in any offer of any P-Notes, or in the establishment of the terms of any P-Notes, or in the

preparation of any disclosure related to any P-Notes. Any P-Notes that may be offered are issued by, and are the

sole obligations of, third parties that are unrelated to our Company. Our Company and the BRLMs do not make

any recommendation as to any investment in P-Notes and do not accept any responsibility whatsoever in

connection with any P-Notes. Any P-Notes that may be issued are not securities of the BRLMs and does not

constitute any obligations of or claims on the BRLMs.

Bidders interested in purchasing any P-Notes have the responsibility to obtain adequate disclosures as to

the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes from the issuer(s) of such P-

Notes. Neither SEBI nor any other regulatory authority has reviewed or approved any P-Notes or any

disclosure related thereto. Prospective investors are urged to consult their own financial, legal, accounting

and tax advisors regarding any contemplated investment in P-Notes, including whether P-Notes are issued

in compliance with applicable laws and regulations.

10

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

As required, a copy of the Preliminary Placement Document and this Placement Document has been submitted to

the Stock Exchanges.

The Stock Exchanges do not in any manner:

(1) warrant, certify or endorse the correctness or completeness of the contents of the Preliminary Placement

Document or this Placement Document; or

(2) warrant that the Equity Shares to be issued pursuant to the Issue, will be listed or will continue to be listed

on the Stock Exchanges; or

(3) take any responsibility for the financial or other soundness of our Company, its Promoters, its management

or any scheme or project of our Company;

and it should not, for any reason be deemed or construed to mean that the Preliminary Placement Document or

this Placement Document has been cleared or approved by the Stock Exchanges. Every person who desires to

apply for or otherwise acquire any Equity Shares may do so pursuant to an independent inquiry, investigation and

analysis and shall not have any claim against the Stock Exchanges whatsoever, by reason of any loss which may

be suffered by such person consequent to or in connection with, such subscription/acquisition, whether by reason

of anything stated or omitted to be stated herein, or for any other reason whatsoever.

11

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Certain Conventions

In this Placement Document, unless otherwise specified or the context otherwise indicates or implies, references

to “you”, “your”, “offeree”, “purchaser”, “subscriber”, “recipient”, “investors” and “potential investor” are to the

Eligible QIBs pursuant to this Issue, references to “our Company”, the “Company”, or the “Issuer” are to Alembic

Pharmaceuticals Limited on a standalone basis and references to “our”, “us”, “we”, or “Group” are to Alembic

Pharmaceuticals Limited together with our Subsidiaries, Joint Venture and Associates, on a consolidated basis.

Currency and Units of Presentation

In this Placement Document, references to ‘US$’, ‘USD’ and ‘U.S. dollars’ are to the legal currency of the United

States of America, references to ‘₹’, ‘INR’, ‘Rs.’, ‘Indian Rupees’ and ‘Rupees’ are to the legal currency of

Republic of India. All references herein to the ‘US’ or ‘U.S.’ or the ‘United States’ are to the United States of

America and its territories and possessions. All references herein to “India” are to the Republic of India and its

territories and possessions and all references herein to the ‘Government’ or ‘GoI’ or the ‘Central Government’ or

the ‘State Government’ are to the Government of India, central or state, as applicable.

References to the singular also refer to the plural and one gender also refers to any other gender, wherever

applicable. All the numbers in this Placement Document have been presented in crore, unless stated otherwise, in

line with the current of presentation used in our Audited Consolidated Financial Statements.

In this Placement Document, references to “Lakh” or “Lacs” represents “100,000”, “million” represents “10 lakh”

or “1,000,000”, “crore” or “crores” represents “10,000,000” or "10 million" or "100 lakhs”, and “billion”

represents “1,000,000,000” or "1,000 million" or "100 crore".

Except as otherwise set out in this Placement Document, certain monetary thresholds have been subject to

rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation

of the figures which precede them.

Page Numbers

Unless otherwise stated, all references to page numbers in this Placement Document are to page numbers of this

Placement Document.

Financial Data and Other Information

In this Placement Document, we have included the Audited Consolidated Financial Statements for Fiscals 2020,

2019 and 2018, prepared in line with Ind AS, notified under the Companies Act, 2013, as amended, read with the

Companies (Indian Accounting Standards) Rules, 2015, as amended.

Our Company presents its financial statements under Ind AS. Ind AS differs from accounting principles with

which prospective investors may be familiar in other countries, including generally accepted accounting principles

followed in the U.S. (“U.S. GAAP”) or International Financial Reporting Standards (“IFRS”). Our Company

does not attempt to quantify the impact of U.S. GAAP or IFRS on the financial data included in this Placement

Document, nor does our Company provide a reconciliation of its audited consolidated financial statements to IFRS

or U.S. GAAP. Accordingly, the degree to which the Audited Consolidated Financial Statements included in this

Placement Document will provide meaningful information is entirely dependent on the reader’s familiarity with

the respective Indian accounting policies and practices. Any reliance by persons not familiar with Indian

accounting practices on the financial disclosures presented in this Placement Document should accordingly be

limited.

Unless otherwise stated or unless the context requires otherwise, the financial information contained in this

Placement Document is derived from our Audited Consolidated Financial Statements. For details, see

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Financial

Statements” on pages 73 and 180, respectively.

M/s. K. S. Aiyar & Co., Chartered Accountants, the Previous Statutory Auditors, have audited the Audited

Consolidated Financial Statements, and have issued audit reports thereon. The Audited Consolidated Financial

12

Statements should be read along with the respective audit reports. M/s K.C. Mehta & Co., Chartered Accountants,

have been appointed as Statutory Auditors of our Company by the shareholders at their AGM held on July 22,

2020 for a period of five years.

The financial year of our Company commences on April 1 of each calendar year and ends on March 31 of the

following calendar year, and, unless otherwise specified or if the context requires otherwise. The terms "Fiscal",

“Fiscals” or "Fiscal year", refer to the 12 month period ending March 31 of that particular year.

13

INDUSTRY AND MARKET DATA

Information included in this Placement Document regarding market position, growth rates, industry forecasts and

other industry data pertaining to our Company’s business consists of estimates based on industry reports compiled

primarily by government bodies, data from other external sources and knowledge of the markets in which we

operate. Unless stated otherwise, statistical information included in this Placement Document pertaining to the

various sectors in which we operate has been reproduced from trade, industry and government publications and

websites. We confirm that such information and data has been accurately reproduced, and that as far as we are

aware and are able to ascertain from information published by third parties, no facts have been omitted that would

render the reproduced information inaccurate or misleading.

In this context, please note that in addition to publicly available government data (both domestic and

international), including those provided by the Pharmexcil and USFDA, we have relied on the IQVIA Research

Reports, which have been made available to our Company by IQVIA. This information is subject to change and

cannot be verified with complete certainty due to limits on the availability and reliability of the raw data and other

limitations and uncertainties inherent in any statistical survey.

Neither our Company, nor the BRLMs have independently verified this industry data, nor does the Company nor

the BRLMs make any representation regarding the accuracy of such data. Similarly, while our Company believes

that its internal estimates to be reasonable, such estimates have not been verified by any independent sources, and

neither we nor the BRLMs can assure potential investors as to their accuracy. The extent to which the market and

industry data used in this Placement Document is meaningful depends on the reader’s familiarity with and

understanding of the methodologies used in compiling such data. Such data involves risks, uncertainties and

numerous assumptions and is subject to change based on various factors, including those discussed in “Risk

Factors – We have relied on various industry sources, including publicly available data, for reproducing industry

related data in this Placement Document and such data has not been independently verified by us.” on page 54.

14

FORWARD-LOOKING STATEMENTS

Certain statements contained in this Placement Document that are not statements of historical fact constitute

'forward-looking statements'. Investors can generally identify forward-looking statements by terminology such as

'aim', 'anticipate', 'believe', 'continue', 'can', 'could', 'estimate', 'expect', 'intend', 'may', 'objective', 'plan', 'potential',

'project', 'pursue', 'shall', 'should', 'will', 'would', 'will likely result' 'is likely', 'are likely', 'believe', 'expect', 'expected

to', 'will continue', 'will achieve', or other words or phrases of similar import. Similarly, statements that describe

our strategies, objectives, plans or goals are also forward-looking statements. However, these are not the exclusive

means of identifying forward-looking statements.

All statements regarding our expected financial conditions, results of operations, business plans and prospects are

forward-looking statements. These forward-looking statements include statements as to our business strategy,

revenue and profitability (including, without limitation, any financial or operating projections or forecasts), new

business and other matters discussed in this Placement Document that are not historical facts. These forward-

looking statements contained in this Placement Document (whether made by us or any third party), are predictions

and involve known and unknown risks, uncertainties, assumptions and other factors that may cause our actual

results, performance or achievements of our Company to be materially different from any future results,

performance or achievements expressed or implied by such forward-looking statements or other projections. By

their nature, market risk disclosures are only estimates and could be materially different from what actually occurs

in the future. As a result, actual future gains, losses or impact on net interest income and net income could

materially differ from those that have been estimated, expressed or implied by such forward looking statements

or other projections.

Important factors that could cause our actual results, performances and achievements to be materially different

from any of the forward-looking statements include, among others:

• Any change in the heavily regulated pharmaceutical industry, both in India and overseas leading to

difficulty in us procuring licenses, registrations and approvals including for a new product;

• Loss of one or more significant customers or a reduction in their demand for products, in India and in the

US markets;

• Impact of the COVID-19 pandemic on our business and operations in future;

• Inability to compete successfully against existing or new competitors in India and in the overseas markets;

and

• Decreased opportunities to obtain United States market exclusivity products.

Additional factors that could cause our actual results, performance or achievements to differ materially include,

but are not limited to, those discussed under the sections "Risk Factors", "Management’s Discussion and Analysis

of Financial Condition and Results of Operations", "Industry Overview" and "Our Business" and on pages 35, 73,

93 and 106, respectively.

The forward-looking statements contained in this Placement Document are based on the beliefs of our

management, as well as the assumptions made by, and information currently available to, our management.

Although we believe that the expectations reflected in such forward-looking statements are reasonable at this time,

we cannot assure investors that such expectations will prove to be correct. Given these uncertainties, investors are

cautioned not to place undue reliance on such forward-looking statements. In any event, these statements speak

only as of the date of this Placement Document or the respective dates indicated in this Placement Document, and

neither we nor the BRLMs undertake any obligation to update or revise any of them, whether as a result of new

information, future events or otherwise. If any of these risks and uncertainties materialise, or if any of our

underlying assumptions prove to be incorrect, our actual results of operations or financial condition could differ

materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-

looking statements attributable to us are expressly qualified in their entirety by reference to these cautionary

statements.

15

ENFORCEMENT OF CIVIL LIABILITIES

Our Company is a limited liability company incorporated under the laws of India. All our Directors, Key

Management Personnel and Senior Management Personnel named in this Placement Document, except Craig

Salmon are residents of India and most of the assets of our Company are located in India. As a result, it may be

difficult or may not be possible for the prospective investors outside India to affect service of process upon our

Company or such persons in India, or to enforce against them judgments of courts outside India.

India is not a signatory to any international treaty in relation to the recognition or enforcement of foreign

judgments. However, recognition and enforcement of foreign judgments is provided for under Section 13 and

Section 44A, respectively, of the Civil Procedure Code. Section 13 of the Civil Procedure Code provides that a

foreign judgment shall be conclusive regarding any matter directly adjudicated upon between the same parties or

parties litigating under the same title, except:

(a) where the judgment has not been pronounced by a court of competent jurisdiction;

(b) where the judgment has not been given on the merits of the case;

(c) where it appears on the face of the proceedings that the judgment is founded on an incorrect view of

international law or a refusal to recognise the law of India in cases in which such law is applicable;

(d) where the proceedings in which the judgment was obtained were opposed to natural justice;

(e) where the judgment has been obtained by fraud; and

(f) where the judgment sustains a claim founded on a breach of any law then in force in India.

Section 44A of the Civil Procedure Code provides that a foreign judgment rendered by a superior court (within

the meaning of that section) in any jurisdiction outside India which the Government has by notification declared

to be a reciprocating territory, may be enforced in India by proceedings in execution as if the judgment had been

rendered by a district court in India. Under Section 14 of the Civil Procedure Code, a court in India will, upon the

production of any document purporting to be a certified copy of a foreign judgment, presume that the foreign

judgment was pronounced by a court of competent jurisdiction, unless the contrary appears on record but such

presumption may be displaced by proving want of jurisdiction. However, Section 44A of the Civil Procedure

Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or

other charges of a like nature or in respect of a fine or other penalties and does not include arbitration awards.

Each of the United Kingdom, United Arab Emirates, Singapore and Hong Kong, amongst others has been declared

by the Government to be a reciprocating territory for the purposes of Section 44A of the Civil Procedure Code,

but the United States of America has not been so declared. A judgment of a court in a jurisdiction which is not a

reciprocating territory may be enforced only by a fresh suit upon the judgment and not by proceedings in

execution. The suit must be filed in India within three years from the date of the foreign judgment in the same

manner as any other suit filed to enforce a civil liability in India. Accordingly, a judgment of a court in the United

States may be enforced only by a fresh suit upon the foreign judgment and not by proceedings in execution.

It is unlikely that a court in India would award damages on the same basis as a foreign court if an action is brought

in India. Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it views the amount

of damages awarded as excessive or inconsistent with public policy of India and it is uncertain whether an Indian

court would enforce foreign judgments that would contravene or violate Indian law. Further, any judgment or

award denominated in a foreign currency would be converted into Indian Rupees on the date of such judgment or

award and not on the date of payment. A party seeking to enforce a foreign judgment in India is required to obtain

approval from the RBI to repatriate outside India any amount recovered, and any such amount may be subject to

income tax pursuant to execution of such a judgment in accordance with applicable laws.

16

EXCHANGE RATES INFORMATION

Fluctuations in the exchange rate between the Rupee and foreign currencies will affect the foreign currency

equivalent of the Rupee price of the Equity Shares traded on the Stock Exchanges. These fluctuations will also

affect the conversion into foreign currencies of any cash dividends paid in Rupees on the Equity Shares.

The following table sets forth information, for the period indicated with respect to the exchange rates between the

Rupee and the U.S. dollar (in ₹ per US$), for the periods indicated. The exchange rates are based on the reference

rates released by the RBI and Financial Benchmark India Private Limited (“FBIL”), which are available on the

website of the RBI and FBIL. No representation is made that any Rupee amounts could have been, or could be,

converted into U.S. dollars at any particular rate, the rates stated below, or at all.

(₹ per US$)

Period End(1) Average(2) High(3) Low(4)

Fiscal Ended:

March 31, 2020 75.39 70.88 76.15 68.37

March 31, 2019 69.17 69.89 74.39 64.93

March 31, 2018 65.04 64.45 65.76 63.35

Month Ended

July 31, 2020 74.77 74.99 75.58 74.68

June 30, 2020 75.53 75.73 76.21 75.33

May 31, 2020 75.64 75.66 75.93 75.39

April 30, 2020 75.12 76.24 76.81 75.12

March 31, 2020 75.39 74.35 76.15 72.24

February 29, 2020 72.19 71.49 72.09 71.14 (Source: www.rbi.org.in and www.fbil.org.in)

1. The price for the period end refers to the price as on the last trading day of the respective annual or monthly periods. 2. Average of the official rate for each Working Day of the relevant period.

3. Maximum of the official rate for each Working Day of the relevant period.

4. Minimum of the official rate for each Working Day of the relevant period.

Notes:

• If the reference rate is not available on a particular date due to a public holiday or being Saturday or Sunday, exchange rates of the

previous Working Day have been disclosed.

• The reference rates are rounded off to two decimal places.

17

DEFINITIONS AND ABBREVIATIONS

This Placement Document uses the definitions and abbreviations set forth below which you should consider when

reading the information contained herein. The following list of certain capitalised terms used in this Placement

Document is intended for the convenience of the reader / prospective investor only and is not exhaustive.

Unless otherwise specified, the capitalised terms used in this Placement Document shall have the meaning as

defined hereunder. Further, any references to any statute, rules, guidelines, regulations or policies shall include

amendments thereto, from time to time.

The words and expressions used in this Placement Document but not defined herein, shall have, to the extent

applicable, the meaning ascribed to such terms under the Companies Act, the SEBI Regulations, the SCRA, the

Depositories Act, or the rules and regulations made thereunder. Notwithstanding the foregoing, terms used in the

section “Industry Overview”, “Statement of Special Tax Benefits”, “Legal Proceedings” and “Financial

Statements” beginning on pages 93, 161, 174 and 180, respectively, shall have the meaning given to such terms

in such sections.

General terms

Term Description

“Issuer”/“Company”/“our Company” Alembic Pharmaceuticals Limited, a public limited company incorporated under

the Companies Act, 1956 and having its Registered and Corporate Office (as

hereinafter defined) at Alembic Road, Vadodara 390003, Gujarat, India.

“we”, “Group”, “us” or “our” Unless the context otherwise indicates or implies, refers to our Company together

with our Subsidiaries, Joint Venture and Associates

Company related terms

Term Description

“Articles” or “Articles of Association” Articles of association of our Company, as amended from time to time

Associates Incozen Therapeutics Private Limited, Rhizen Pharmaceuticals SA, Rhizen

Pharmaceuticals Inc. and Dahlia Therapeutics SA

Audit Committee The audit committee of our Board of Directors

Audited Consolidated Financial

Statements/Financial Statements

The audited consolidated financial statements of our Company as at and for the

Fiscals ended 2020, 2019 and 2018, which have been prepared in all material

aspects, in accordance with the recognition and measurement principles laid

down in Ind AS as per the Companies (Indian Accounting Standards) Rules,

2015 notified under Section 133 and other relevant provisions of the Companies

Act, to the extent applicable

ADL Aleor Dermaceuticals Limited

“Board of Directors” or “Board” The board of directors of our Company or any duly constituted committee

thereof

Compliance Officer Charandeep Singh Saluja, the company secretary and compliance officer of our

Company

Corporate Social Responsibility

Committee

The corporate social responsibility committee of our Board of Directors

Director(s) Director(s) on the Board of our Company

Equity Share(s) The equity shares of our Company, each having a face value of ₹ 2

Executive Chairman and CEO The executive chairman and chief executive officer of our Company, being

Chirayu Amin

Executive Director(s) The executive Director(s) of our Company, being Chirayu Amin, Pranav Amin,

Shaunak Amin and Raj Kumar Baheti

Fund Raising Committee The fund raising committee of our Board, constituted through a resolution of our

Board dated July 27, 2020, comprising of (i) Pranav Amin; (ii) Paresh Saraiya;

(iii) Shaunak Amin; and (iv) Raj Kumar Baheti

Independent Director(s) The independent Director(s) of our Company, being Krishnapuram

Ramanathan, Pranav Parikh, Paresh Saraiya and Archana Hingorani

IQVIA The IQVIA entities which have published the IQVIA Research Reports (as

defined below)

IQVIA Research Reports Research reports published by IQVIA, titled (i) “US Generics Market-Evolution

of Indian Players” (published in February 2019); (ii) “Medicine Use and

18

Term Description

Spending in the U.S” (published in May 2019); (iii) “Global Medicine Spending

& Usage Trends” (published in March 2020); (iv) “Complex Generics: Charting

a New Path” (published in 2017); (v) IQVIA TSA (published in April 2020) and

IQVIA TSA (published in March 2020), as used in this Placement Document

IQVIA TSA Corporate summary reports, as issued by IQVIA for March 2020 and April 2020,

respectively

Joint Venture Alembic Mami SPA and SPH Sine Alembic (Shanghai) Pharmaceutical

Technology Company Limited

Managing Director(s) The managing directors of our Company, being Pranav Amin and Shaunak Amin

Memorandum/Memorandum of

Association

Memorandum of association of our Company, as amended from time to time

Nomination and Remuneration

Committee

The nomination and remuneration committee of our Board of Directors

Previous Statutory Auditors The previous statutory auditors of our Company, being K.S Aiyar & Co.,

Chartered Accountants

Promoters The promoters of our Company in terms of the SEBI Regulations and the

Companies Act, being Chirayu Amin, Pranav Amin, Shaunak Amin and

Alembic Limited

Promoter Group Unless the context requires otherwise, the promoter group of our Company as

identified in accordance with Regulation 2(1)(pp) of the SEBI Regulations

Registered and Corporate Office The registered and corporate office of our Company, located at Alembic Road,

Vadodara 390 003, Gujarat, India

Rhizen Rhizen Pharmaceuticals SA

Risk Management Committee The risk management committee of our Board of Directors

“RoC” or “Registrar of Companies” Registrar of Companies, Gujarat at Ahmedabad

Senior Management Personnel Senior management personnel of our Company, as disclosed in “Board of

Directors and Senior Management” on page 118

Shareholder(s) The holder(s) of Equity Shares of our Company, unless otherwise specified in

the context thereof.

Stakeholders Relationship Committee The stakeholders relationship committee of our Board of Directors

Statutory Auditors The current statutory auditors of our Company, being M/s. K. C. Mehta & Co.,

Chartered Accountants

Subsidiaries Subsidiaries of our Company as of the date of this Placement Document, in

accordance with the Companies Act, 2013 and the applicable accounting

standards, namely: (i) Alembic Pharmaceuticals Inc.; (ii) Aleor Dermaceuticals

Limited; (iii) Alembic Global Holding SA; (iv) Alembic Pharmaceuticals

Europe Limited; (v) Alembic Pharmaceuticals Australia Pty Limited; (vi)

Alembic Pharmaceuticals Canada Limited; (vii) Alnova Pharmaceuticals SA;

(viii) Genius LLC; (ix) Okner Realty LLC; and (x) Alembic Labs LLC

Issue related terms

Term Description

“Allocated” or “Allocation” The allocation of Equity Shares following the determination of the Issue Price to

Eligible QIBs on the basis of the Application Forms submitted by them, by our

Company in consultation with the BRLMs and in compliance with Chapter VI of

the SEBI Regulations

“Allot” or “Allotment” or “Allotted” Unless, the context otherwise requires, allotment of Equity Shares to be issued

pursuant to the Issue

Allottees Eligible QIBs to whom Equity Shares are Allotted pursuant to the Issue. An

indicative format of such form is set forth in “Application Form” on page 192

Application Form The form (including any revisions thereof) which will be submitted by an Eligible

QIB for registering a Bid in the Issue during the Bid/ Issue Period

Bid(s) Indication of an Eligible QIB’s interest, including all revisions and modifications

thereto, as provided in the Application Form, to subscribe for the Equity Shares,

pursuant to the Issue. The term “Bidding” shall be construed accordingly

Bid Amount The aggregate amount determined by multiplying the price per Equity Share

indicated in the Bid by the number of Equity Shares Bid for by Eligible QIBs and

payable by the Eligible QIBs in the Issue on submission of the Application Form

Bid/Issue Closing Date August 6, 2020, which was the last date up to which Application Forms and the

Bid Amount were accepted

19

Term Description

Bid/Issue Opening Date August 3, 2020, which was the first date from which Application Forms and the

Bid Amount were accepted

Bid/Issue Period Period between the Bid/ Issue Opening Date and the Bid/ Issue Closing Date,

inclusive of both days during which Eligible QIBs could submit their Bids along

with the Bid Amount

Bidder Any prospective investor, being an Eligible QIB, who has made a Bid pursuant

to the terms of the Preliminary Placement Document and the Application Form

“Book Running Lead Managers” or

“BRLMs”

Collectively, Monarch Networth Capital Limited and HDFC Bank Limited

“CAN” or “Confirmation of Allocation

Note”

Note or advice or intimation to Successful Bidders confirming Allocation of

Equity Shares to such Successful Bidders after discovery of the Issue Price

Closing Date The date on which Allotment of Equity Shares pursuant to the Issue shall be made,

i.e. on or about August 7, 2020

Designated Date The date of credit of Equity Shares to the Allottees’ demat accounts pursuant to

the Issue, as applicable to the relevant Allottees

Eligible FPI FPIs that are eligible to Bid for Equity Shares to be Allotted in this Issue in terms

of applicable laws, other than individuals, corporate bodies and family offices

Eligible QIB(s) QIBs which are eligible to participate in this Issue and who are (i) not excluded

pursuant to Regulation 179(2)(b) of the SEBI Regulations, and (ii) not restricted

from participating in this Issue under applicable law, including the SEBI

Regulations

Escrow Account Special non-interest bearing, no-lien, current bank account without any cheques

or overdraft facilities, opened with the Escrow Bank, subject to the terms of the

Escrow Agreement, into which the Bid Amount has been deposited by Eligible

QIBs and from which refunds, if any, shall be remitted to unsuccessful Bidders,

as set out in the Application Form

Escrow Agreement Agreement dated August 3, 2020 entered into amongst our Company, the Escrow

Bank and the BRLMs for collection of the Bid Amounts and for remitting refunds,

if any, of the amounts collected, to the Bidders

Escrow Bank HDFC Bank Limited

Floor Price The floor price of ₹980.75 per Equity Share, calculated in accordance with

Chapter VI of the SEBI Regulations. Our Company has offered a discount of ₹

48.75 per Equity Share (4.97% on the Floor Price) in accordance with and in terms

of Regulation 176 of the SEBI Regulations

Issue The issue, offer and Allotment of the Equity Shares to Eligible QIBs, pursuant to

Chapter VI of the SEBI Regulations and the applicable provisions of the

Companies Act and the rules made thereunder

Issue Price ₹ 932.00 per Equity Share

Issue Size The issue of 80,47,210 Equity Shares, aggregating to approximately ₹750.00

crore

Mutual Fund A mutual fund registered with SEBI under the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996

Net Proceeds The net proceeds from the Issue, after deducting Issue related expenses, as

applicable

Placement Agreement Agreement dated August 3, 2020, entered into amongst our Company and the

BRLMs

Placement Document This placement document dated August 6, 2020, issued by our Company in

accordance with Chapter VI of the SEBI Regulations and Section 42 of the

Companies Act and rules made thereunder

Preliminary Placement Document The preliminary placement document dated August 3, 2020, for this Issue issued

in accordance with Chapter VI of the SEBI Regulations and Section 42 of the

Companies Act and the rules thereunder

“QIBs” or “Qualified Institutional

Buyers”

Qualified institutional buyers as defined under Regulation 2(1)(ss) of the SEBI

Regulations

QIP Qualified institutions placement under Chapter VI of the SEBI Regulations and

Section 42 of the Companies Act and rules made thereunder

Refund Amount The aggregate amount to be returned to the Bidders who have not been Allocated

Equity Shares for all or part of the Bid Amount submitted by such Bidder pursuant

to the Issue

Refund Intimation Letter Letters from our Company intimating the Bidders on the amount to be refunded,

if any, either in part or whole, to their respective bank accounts.

Relevant Date August 3, 2020, which is the date of the meeting of the Fund Raising Committee

of the Board, a committee duly authorised by our Board, deciding to open the

Issue

20

Term Description

Stock Exchanges Collectively, the BSE Limited and the National Stock Exchange of India Limited

Successful Bidders The Bidders who have Bid at or above the Issue Price, duly paid the Bid Amount

along with the Application Form and who are Allocated Equity Shares pursuant

to the Issue

Wilful Defaulter An entity or person categorised as a wilful defaulter by any bank or financial

institution or consortium thereof, in terms of Regulation 2(1)(lll) of the SEBI

Regulations

Working Day Any day other than second and fourth Saturday of the relevant month or a Sunday

or a public holiday or a day on which scheduled commercial banks are authorised

or obligated by law to remain closed in India

Industry Related Terms

Term Description

ANDA Abbreviated New Drug Application

ANVISA Brazilian Health Regulatory Agency

API Active Pharmaceutical Ingredient

Australian TGA Australian Therapeutic Goods Administration

B2B Business to Business

BA Bioavailability

BE Bioequivalence

CDSCO Central Drugs Standard Control Organization

cGMP current Good Manufacturing Practices

CS Central Sector Scheme

DCGI Drug Controller General of India

Developed markets Developed markets are defined by IQVIA as ten countries with high incomes

and with pharmaceutical spending greater than $10 billion, namely the United

States, Japan, Germany, France, Italy, Spain, United Kingdom, Canada, South

Korea and Australia

DMF Drug Master File

DPIIT Department for Promotion of Industry and Internal Trade

EDQM European Directorate for Quality of Medicines

EIR Establishment Inspection Report

EU European Union

GDP Gross domestic product

GDUFA Generic Drug User Fee Amendments

GMP Good Manufacturing Practices

HCV Hepatitis C virus

HIV Human Immunodeficiency Virus

HPCD Health Product Compliance Directorate

IPM Indian Pharmaceutical Market

KYC Know your customer

LOE Loss of Exclusivity

MNCs Multinational companies

MoH, Brazil Ministry of Health, Brazil

MT Metric ton

NDA New Drug Application

OSD Oral Solid Dosage

PBMs Pharmacy Benefit Manager

Paragraph IV Pursuant to use of a Paragraph IV certification, a generic manufacturer can either

challenge the validity of applicable patents in the NDA or certify that the generic

equivalent product will not infringe any patent held by the pioneer drug company

whose patent(s) is part of the NDA. The generic manufacturer

contemporaneously with its Paragraph IV certification must notify the innovator

manufacturer that it is filing a Paragraph IV certification with its ANDA

Pharmerging markets Pharmerging markets, are defined by IQVIA as countries with per capita income

below $30,000 per year and five-year absolute growth in pharmaceutical

spending greater than $1 billion. These include Algeria, Argentina, Bangladesh,

Brazil, Chile, China, Colombia, Egypt, India, Indonesia, Kazakhstan, Mexico,

21

Term Description

Nigeria, Pakistan, Philippines, Poland, Russia, Saudi Arabia, South Africa,

Thailand, Turkey and Vietnam.

Pharmexcil Pharmaceuticals Export Promotion Council of India

QC Quality Control

R&D Research and development

SIA State Implementing Agency

SME Small and Medium Enterprise

SOP Standard Operating Procedure

UK MHRA UK Medicines and Healthcare Products Regulatory Agency

USFDA United States Food and Drug Administration

WBAD Walgreens Boots Alliance Development

WHO World Health Organization

Conventional and General Terms/Abbreviations

Term Description

AGM Annual general meeting

AIF(s) Alternative investment funds, as defined and registered with SEBI under the

Securities and Exchange Board of India (Alternative Investment Funds)

Regulations, 2012

AS Accounting Standards issued by ICAI, as required under the Companies Act

AY Assessment year

BSE BSE Limited

CDSL Central Depository Services (India) Limited

CEO Chief executive officer

CFO Chief financial officer

CIN Corporate Identity Number

CSR Corporate social responsibility

Civil Procedure Code The Code of Civil Procedure, 1908

Companies Act / Companies Act, 2013 The Companies Act, 2013 and the rules, regulations, circulars, modifications

and clarifications thereunder, to the extent notified

Companies Act, 1956 The erstwhile Companies Act, 1956 along with the rules made thereunder

Depositories Act The Depositories Act, 1996

Depository A depository registered with SEBI under the Securities and Exchange Board of

India (Depositories and Participant) Regulations, 2018

Depository Participant A depository participant as defined under the Depositories Act

DIN Director Identification Number

EGM Extraordinary general meeting

FDI Foreign direct investment

FDI Policy Consolidated FDI policy issued by the Department for Promotion of Industry

and Internal Trade (formerly Department of Industrial Policy and Promotion),

Ministry of Commerce and Industry, GoI by circular D/o IPP F. No. 5(1)/2017-

FC-1 of 2017, with effect from August 28, 2017

FEMA The Foreign Exchange Management Act, 1999 and the regulations issued

thereunder

FEMA Rules The Foreign Exchange Management (Non Debt Instruments) Rules, 2019

"Financial year" or "Fiscal Year" or

"FY" or "Fiscal"

Unless otherwise stated, the period of 12 months commencing on April 1 of a

year and ending on March 31 of the next year

Form PAS-4 Form PAS-4 as prescribed under the Companies (Prospectus and Allotment of

Securities) Rules, 2014, as amended.

FPI Foreign portfolio investors as defined under the SEBI FPI Regulations and

includes a person who has been registered under the SEBI FPI Regulations.

Fugitive Economic Offender An individual who is declared a fugitive economic offender under Section 12 of

the Fugitive Economic Offenders Act, 2018

FVCI Foreign venture capital investors as defined and registered with SEBI under the

Securities and Exchange Board of India (Foreign Venture Capital Investors)

Regulations, 2000

GAAP Generally accepted accounting principles

GIR General index registrar

“GoI” or "Government" Government of India, unless otherwise specified

22

Term Description

HUF Hindu undivided family

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards of the International Accounting

Standards Board

Ind AS Indian accounting standards converged with IFRS, as notified by the Ministry

of Corporate Affairs through the Indian Accounting Standards Rules in its

general statutory rules dated February 16, 2015

Interest Coverage Ratio Interest coverage ratio is calculated on the basis of profit before tax plus interest

expense divided by interest for the year

IPR Intellectual property rights

IT Information technology

“Lac" or "lakh" Lakhs

“NRI” or "Non-Resident Indian" A person resident outside India who is a citizen of India as defined under the

Foreign Exchange Management (Deposit) Regulations, 2016 or is an ‘Overseas

Citizen of India’ cardholder within the meaning of section 7(A) of the

Citizenship Act, 1955.

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

p.a. Per annum

PAS Rules Companies (Prospectus and Allotment of Securities) Rules, 2014

RBI Reserve Bank of India

Regulation S Regulation S under the U.S. Securities Act

RoC Registrar of Companies, Gujarat at Ahmedabad

"₹" or "Rs." or "Rupees" or "INR" Indian Rupees, the legal currency of the Republic of India

SCR (SECC) Rules Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations)

Regulations, 2018

SCRA Securities Contracts (Regulation) Act, 1956

SCRR Securities Contracts (Regulation) Rules, 1957

SEBI Securities and Exchange Board of India

SEBI Act The Securities and Exchange Board of India Act, 1992

SEBI FPI Regulations The Securities and Exchange Board of India (Foreign Portfolio Investors)

Regulations, 2019

SEBI Insider Trading Regulations The Securities and Exchange Board of India (Prohibition of Insider Trading)

Regulations, 2015

SEBI Listing Regulations The Securities and Exchange Board of India (Listing Obligations and Disclosure

Requirements) Regulations, 2015

SEBI Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2018

SEBI Takeover Regulations The Securities and Exchange Board of India (Substantial Acquisition of Shares

and Takeovers) Regulations, 2011

Stock Exchanges BSE and NSE, taken together

STT Securities transaction tax

"U.S.$ ", "U.S. dollar", or "USD" United States Dollar, the legal currency of the United States

"USA" "U.S. ", or "United States" The United States of America, its territories and possessions (including Puerto

Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the

Northern Mariana Islands and the District of Columbia).

U.S. Securities Act The United States Securities Act of 1933

VCF Venture capital fund

23

SUMMARY OF BUSINESS

Some of the information in the following discussion, including information with respect to our plans and

strategies, contain forward-looking statements that involve risks and uncertainties. You should read “Forward

Looking Statements” on page 14 for a discussion of the risks and uncertainties related to those statements. Our

actual results may differ materially from those expressed in or implied by these forward-looking statements. Also

read “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations- Factors affecting our Financial Results” on pages 35 and 74, respectively, for a discussion of certain

factors that may affect our business, financial condition or results of operations.

Our financial year ends on March 31 of each year, and references to a particular Fiscal are to the twelve months

ended March 31 of that year. Unless context requires otherwise, the financial information used in this section for

the Fiscals 2020, 2019 and 2018 is derived from the Audited Consolidated Financial Statement and referred to

as such. For further information, see “Financial Statements” on page 180.

We are a vertically integrated pharmaceutical company, developing, manufacturing and marketing of formulations

offered in the international markets including in markets such as the United States, European Union, etc

(“International Generics”), formulations which cater to India’s domestic formulations market (“Domestic

Formulations”) and active pharmaceutical ingredients which cater to both domestic and international markets

(“APIs”). We have a presence and sell our products in over 65 countries including the United States, India,

Europe, Canada, Australia, Brazil and South Africa. We provide a diverse suite of products under each of our

business verticals - International Generics, Domestic Formulation and APIs. Our product portfolio in the Domestic

Formulations covers numerous chronic and acute therapy areas and in the International Generics, our products

and products in pipeline include oral solids, dermatology, oncology oral solids, oncology injectables, general

injectables and ophthalmology. For Fiscal 2020, we derived 53.69%, 30.95% and 15.36% of our revenue from

operations from our International Generics, Domestic Formulations and APIs business, respectively.

We have a broad portfolio of Abbreviated New Drug Applications (“ANDAs”) for our International Generic

business filed with the United States Food and Drug Administration (“USFDA”). As of June 30, 2020, we have

received approval for 125 ANDAs including 14 ANDAs which have received tentative approval from USFDA.

Our filings in the United States focus on oral solids (oncology and non-oncology), injectable products (oncology

and non-oncology), ophthalmic and dermatological. As of March 31, 2020, we had successfully launched 76

products in the United States, which we sell through pharmacy chains, wholesalers and distributors. We

manufacture APIs for captive consumption as well as for selling to the customers in domestic and international

markets. As of March 31, 2020, we have filed 123 Drug Master Files (“DMFs”) with the USFDA for our API

products in multiple therapeutic areas, out of which 109 DMFs are active.

We have a presence in the Domestic Formulations market which caters to chronic and acute therapies including

cardiology, anti-diabetic, gynaecology, gastrology, dermatology, orthopaedic, ophthalmology, nephrology /

urology, anti-infective, cold and cough, and veterinary segment.

We rank 21 in Indian Pharma Market (“IPM”) as of March 31, 2020 (Source: March MAT data of IQVIA, TSA

March 2020) with a 1.5% market share in IPM (Source: IQVIA, TSA March 2020). Further, three of our brands

featured amongst the top 300 pharmaceutical brands in India (Source: IQVIA, TSA March 2020).

We operate three R&D centres located at Vadodara (Gujarat, India), Hyderabad (Telangana, India) and at West-

Caldwell (New Jersey, United States). We also have a USFDA approved Bioequivalence Centre, located at

Vadodara (Gujarat, India) which provides support for bioavailability (BA) and bioequivalence (BE) studies and

support our R&D activities. As of March 31, 2020, we employed about 1,100 professionals in our R&D centres

working on APIs and various dosage forms of formulations. Some our R&D efforts are also focused on developing

niche, specialty products to strengthen our product offerings. We dedicate a substantial portion of our revenue

from operations towards R&D activities. Our R&D spend as a percentage to revenue from operations has increased

from 5.92% in Fiscal 2015 to 14.00% in Fiscal 2020.

Further, owing to our strong R&D, we have been granted 911 patents worldwide (for both APIs and formulations),

including patents which have been withdrawn, abandoned or have lapsed, as of March 31, 2020.

We have one facility engaged in the manufacturing of Domestic Formulations located in Sikkim. Two of our

facilities are engaged in the manufacturing of International Generic formulations located in Gujarat out of which

one facility is operated by our joint venture. Three of our facilities for manufacturing APIs are located in Gujarat.

24

All these facilities are currently commercially operational. The manufacturing units which are responsible for

manufacturing our products which are sold in regulated markets (including the United States, Canada, United

Kingdom), comply with applicable regulations and standards and also comply with the targeted markets’

regulatory requirements, for example that of, USFDA’s current Good Manufacturing Practices (“CGMPs”), the

United Kingdom’s medicines and healthcare products regulatory agency (“MHRA”), the Brazilian Health

Regulatory Agency (“ANVISA”), European Directorate for Quality of Medicines (“EDQM”), Australian

Therapeutic Goods Administration (“TGA”), etc. As on date, the Establishment Inspection Report (“EIR”) from

USFDA is in place for each of our operational facilities, where applicable. For more details regarding our

manufacturing facilities, see “Manufacturing Process and Facilities” on page 113.

Driven by a strong management team, our consolidated revenue from operations for Fiscal 2020 was ₹ 4,605.75

crores which was up by 17.06%, compared to ₹ 3,934.68 crores for Fiscal 2019. Our Consolidated PAT for Fiscal

2020 grew by 41.83% to ₹ 828.82 crores from ₹ 584.37 crores for Fiscal 2019.

Our Strengths

The following are our key strengths which we believe enable us to compete in our principal markets:

Focused approach towards the United States formulations business

We believe that our track record of development and filing of ANDAs, ability to meet compliance standards and

ensuring timely delivery of products have been instrumental in driving our success in the United States market.

Consequently, we have been able to increase our product portfolio, deepen our relationships with existing

customers and increase the number of new customers during the past year. For the United States formulations

business, we are focused on launching products across various therapies and dosage forms to maximise existing

and emerging opportunities.

In the United States markets, historically, we started off selling our products to the companies or distributors.

Subsequently, we have set-up our own front-end office in the year 2015 to sell our products under the Alembic

label. In the year 2016, we also formed a joint venture named Aleor Dermaceuticals Limited (“ADL”) with

Orbicular Pharmaceuticals Technologies Private Limited for developing dermatology products for international

markets. During the Fiscal 2019, ADL launched its products in the United States market. As of June 30, 2020,

ADL had received nine approvals including one ANDA which has received a tentative approval.

Through Alembic Global Holding SA incorporated in Switzerland, our wholly owned subsidiary, we have made

an investment in Rhizen Pharmaceuticals SA (“Rhizen”), incorporated in Switzerland. Rhizen has been in the

past, involved in out-licensing its products to other companies in the United States market . Rhizen’s first product

was licensed out to TG Therapeutics which is undergoing a new drug application filing with the USFDA.

High compliance standards across manufacturing facilities with focus on quality assurance

We believe that quality and compliance are the key differentiators in our business and that our focus and emphasis

on maintaining requisite compliance standards across our plants is a key driver in our business. We believe that

the integrated nature of our standard operating procedures, multiple quality checks across the organisation and

round the clock audit preparedness ensures that we maintain such standard at all times.

As on date, the Establishment Inspection Report (“EIR”), which is a factual report issued by the USFDA pursuant

to an inspection it conducts on the factory premises of a company, is in place for each of our USFDA facilities.

The location of our facilities, division, the capabilities thereof and the major approvals received by each of them

is given below:

Location Division Capability Key Approvals

Panelav, Gujarat (F1) Formulations –

International Generics

Tablets, Capsules USFDA

Panelav, Gujarat (F2) Formulations –

International Generics

Oncology oral solids USFDA

Oncology injectables Awaiting FDA inspection

Karkhadi, Gujarat

(F3)

Formulations –

International Generics

General injectables

ophthalmology

Awaiting USFDA inspection

25

Jarod, Gujarat (F4) Formulations –

International Generics

Tablets, Capsules Awaiting USFDA inspection

Karkhadi, Gujarat

(ADL JV)

Formulations Various dermaceutical

formulations

USFDA

Panelav, Gujarat

(API Unit 1)

API API USFDA, ANVISA, EQDM, HPCD

(Canada), EU GMP (Germany),

WHO GMP

Panelav, Gujarat

(API Unit 2)

API API USFDA, HPCD (Canada), EU

GMP (Germany), WHO GMP

Karkhadi, Gujarat

(API Unit 3)

API API USFDA, MHRA (UK), TGA GMP

(Australia) , WHO GMP

Samardung Busty,

Sikkim (Domestic)

Domestic Formulations Tablets, Capsules WHO GMP

We believe our manufacturing facilities are capable of producing a wide range of products, enabling us to position

ourselves as suppliers to customers across the globe.

Well established presence in Domestic Formulations market

We develop, manufacture, market and sell branded pharmaceutical products in select therapeutic areas within the

chronic and acute categories of the Indian pharmaceutical market (“IPM”). Our Domestic Formulations business

accounted for 30.95%, 35.13% and 40.69% of our revenue from operations, for Fiscals 2020, 2019 and 2018,

respectively and continues to be a significant part of our growth strategy in the future.

Further, we have been consistently increasing our presence in the specialty therapies, including cardiology,

diabetes, gynaecology, ophthalmology and veterinary. Specialty remains our key focus area with 64.92% share of

our Domestic Formulation business and acute segments consisting of cough and cold and anti-infective therapies

with 35.08% share of our Domestic Formulation business, for the Fiscal 2020. Domestic Formulation business

contributed towards 30.95% of our total consolidated revenue from operations in Fiscal 2020.

We rank 21 in IPM as of March 31, 2020 (Source: March MAT data of IQVIA, TSA March 2020) with a 1.5%

market share in domestic pharma space in India (Source: IQVIA, TSA March 2020). Further, three of our brands

featured amongst the top 300 pharmaceutical brands in India (Source: IQVIA, TSA March 2020).

Our sales team comprised of around 5,000 field colleagues, as of March 31, 2020, which allows us to

commercialise our pharmaceutical products.

Strong R&D capabilities with substantial spending over last few years

We are a R&D focussed company and we believe that our strong R&D expertise are critical for our success across

businesses. Our formulations R&D activities include development of various dosage of formulations (such as

OSD and injectables, oncology and dermaceutical products) and is supported by strong dedicated teams for

analytics, documentation and IPR. We also have API development teams focused on developing and filing our

DMFs with the USFDA.

We have three R&D centres in Vadodara (Gujarat, India), Hyderabad (Telangana, India) and West-Caldwell (New

Jersey, United States) with about 1,100 R&D professionals across these centres. Our R&D activities primarily

include developing new products, improving existing products, improving /innovating drug delivery systems and

expanding product applications. Historically, we have invested significantly to augment our R&D capabilities

specifically around therapies (including cardiovascular, oncology, peptides, central nervous system),

dermaceuticals and injectables (general and oncology). We proactively scan our R&D grid to realign our product

portfolio by mapping it with the critical factors such as potential to garner desired market share by focussing on

the United States market and generate profits.

As of June 30, 2020, we have received approval for 125 ANDAs including 14 ANDAs which have received

tentative approval from USFDA. Our filings in the United States focus on oral solids (oncology and non-

oncology), injectable products (oncology and non-oncology), ophthalmic and dermatological. As of March 31,

2020, we had launched 76 products in the United States. As of March 31, 2020, we have filed 123 DMFs with the

USFDA for our API products in multiple therapeutic areas, out of which 109 DMFs are active. We spent ₹ 644.82

crore (14.00% of our total revenue from operations), ₹ 503.64 crore (12.80% of our total revenue from operations)

26

and ₹ 411.28 crore (13.14% of our total revenue from operations) in R&D expenditure during Fiscal 2020, Fiscal

2019 and Fiscal 2018, respectively. We have been granted 911 approximately patents worldwide (for both APIs

and formulations), including patents which have been withdrawn, abandoned or have lapsed, as of March 31,

2020.

Our commitment towards R&D is well evidenced from our increasing R&D spend as a percentage of total revenue

from operations, which has substantially increased from 5.92% of revenue from operations in Fiscal 2015 to

14.00% of revenue from operations in Fiscal 2020.

Vertical integration leading to operating leverage and supply reliability

We are a vertically integrated pharmaceutical company with in-house sourcing of APIs for several of our products.

We have invested financial and manpower resources in building infrastructure for the manufacture of APIs and

generic formulations in order to become a vertically integrated pharmaceutical company. We believe, our in-house

manufacturing of APIs has provided us with a competitive advantage in the generic formulations market through

helping us maintain quality control, mitigate the demand-supply fluctuations that routinely affect generics markets

and provides consistency and reliability of supply. We believe that our vertically integrated manufacturing

approach coupled with our process, supply chain and productivity efficiencies, contribute to our production cost

advantage and offers competitive advantage to us. We continue to improve and assess our programs designed to

increase efficiency and enhance economies of scale in order to further reduce costs.

Diversified product offering across therapeutic categories to various geographies

Our business is diverse in terms of therapeutic areas and geographies catered to, thereby mitigating concentration

risks. We offer a wide range of products across several major therapeutic categories, including cardiology, anti-

diabetic, gynaecology, gastrology, dermatology, orthopaedic, ophthalmology, nephrology / urology, anti-infective

and cold and cough. Our products (including products in pipeline) cover variety of dosage forms including oral

solids, dermatology, oncology oral solids, oncology injectables, general injectables and ophthalmology. We

believe that the depth and diversity of our product portfolio benefits our customers by providing them with a

single dependable source for a substantial number of their pharmaceutical requirements. Our large product

portfolio also helps us realise sales and distribution synergies. Further, we believe that a diversified product

portfolio such as ours, across various therapies and geographies, diminishes the risk associated with the

dependence on any particular product or country. No single product accounted for more than 5% of our total gross

revenues from operations for the Fiscal 2020 and our revenues were diversified across over 65 countries.

Experienced Management Team

We are led by a qualified and experienced management team with the vision and expertise to help manage and

grow our business. In addition to our Promoters, each of whom has extensive experience and a strong background

in the pharmaceutical industry, we also have a qualified strong senior management team that has significant

experience in all aspects of our business. We have been able to attract and retain senior and middle-level

management executives from top tier organizations. We believe that the knowledge and experience of our

Promoters in healthcare, along with that of our senior and middle-level management, provides us with a strong

platform as we seek to expand our business in existing markets and enter new geographies.

Our Strategies

Expand and improve our United States formulations products portfolio

Our strategy in the United States is to continue to focus on the existing and new formulations and enhance our

product portfolio by accelerating ANDA filings. Our United States formulations business has grown to ₹1,976.00

crore in Fiscal 2020, accounting for 42.90% of total revenue from operations on a consolidated for the Fiscal.

United States formulation business remains a significant growth engine for us and has grown at a CAGR of

44.28% from Fiscal 2015 to Fiscal 2020. We also believe that we have the ability to deliver quality products in a

timely manner as per the customers’ orders.

We are looking to launch new and distinct products and enhancing the value proposition of our existing products.

Our focus is on developing complex, niche products having limited competition. With this view, during the last

four Fiscals, we have significantly invested in our manufacturing and R&D capabilities with focus on expanding

and improving our current product offerings specially in the United States.

27

We are in the process of expanding our capacity to allow us to have enhanced new dosage offerings across

ophthalmology, general injectables, oncology injectables and oral solids (oncology and non-oncology) and will

be able to cater to the demand in United States generics segment. We have already started commercial production

in our dermaceuticals plant under our joint venture, ADL.

Over the years, we have invested significantly to augment our R&D capabilities across several high-growth and

high-value therapies. Our R&D expenses as a percentage to our revenue from operations have increased from

5.92% in Fiscal 2015 to 14.00% in Fiscal 2020. Bulk of our R&D investments are focused towards the United

States formulations business. We believe that this R&D focussed approach has dividends over the years and we

remain hopeful of it yielding growth in the United States business segment. In order to optimize the R&D

investments, several filters are applied by cross-functional teams before taking a product in the R&D grid.

We have experience in 505(b)(2) filings for new drug applications and paragraph IV filings for ANDAs required

by the USFDA. We filed/acquired 25, 29 and 37 ANDAs in the United States in Fiscals 2020, 2019 and 2018,

respectively. Our portfolio which was largely dominated by oral solids is now being expanded to include

ophthalmology, dermaceuticals, oncology (oral solids) and injectables (oncology and general) owing to our R&D

efforts.

Strengthen our Domestic Formulations business through consolidating our presence and venturing into new

fast growth therapy segments

Our Domestic Formulations business accounted for 30.95%, 35.13% and 40.69% of our revenue from operations

for Fiscals 2020, 2019 and 2018, respectively and continues to be a significant part of our growth strategy in the

future. In this segment, we cater to therapeutic areas such as cardiology, anti-diabetic, gynaecology, gastrology,

dermatological, orthopaedic, ophthalmology, nephrology / urology, anti-infective and cold and cough and

veterinary segment. We believe that our sales team of around 5,000 field colleagues and right product launches

are key enablers for this business. From Fiscal 2018 to Fiscal 2020, our Domestic Formulations business has

grown at a CAGR of 5.78%.

In addition to consolidating presence in our existing brands and therapeutic areas, we have also focused our efforts

on pursuing opportunities in fast growing therapeutic areas where we believe we can grow our presence, such as,

cardiology, diabetes, gynaecology and ophthalmology. Our strategy for expansion in existing and new therapeutic

areas includes extending our focus to target lifestyle disorders and the chronic category (to target products that

have to be prescribed over an extended period of time as opposed to one time incidence related medication),

identifying gaps in existing interventions, analysing patient compliance, and working with key opinion leaders,

doctors and patients through active engagement to develop, manufacture and market new indications which fulfil

an unmet need or are clinically differentiated.

We also have invested in sales force management system, which captures data at the headquarters and employee

levels, to make our sales staff more productive. Our marketing team utilises a variety of marketing techniques and

programs to promote our products. We believe that focusing on marketing will help us in enhancing emphasis on

the product coverage that we offer and improving our market share in India.

Leverage our API business to improve our competitive advantage in International Generics business

Our API business is strategically important since it allows us to backward integrate our operations. Our API

business helps us reduce cost and increase revenue margin and timely delivery of raw materials of desired quality

and quantity for our International Generics business. We believe that our presence in API production improves

our ability to maintain quality and mitigates the demand-supply fluctuations that affect generics markets thereby

providing for consistency and reliability of supply in an increasingly regulated global environment. It further

protects us from relying on external sources for our raw materials, thereby reducing risk of unfavourable terms of

supply such as high pricing and long timeline for delivery.

In our International Generics business, critical oral solids portfolio is backward integrated in terms of API

supplies. Beyond backward integration, our API business also acts as a key focus area as it continues to grow in

the regulated markets and we are a preferred vendor to our customers owing to the quality of our products and

dependability. The key strengths of our API business are our manufacturing expertise and a good compliance

track record. We have implemented several measures to enhance operational efficiency of this business including

automation of our processes to reduce contamination.

28

We have three USFDA approved API facilities, two in Panelav (Gujarat, India) and one in Karkhadi (Gujarat,

India) which underwent USFDA audits and have received EIR for each of the units. Our API facilities are located

closer to our formulations units, thereby giving us significant operational efficiencies. As of March 31, 2020, we

have filed 123 DMFs with the USFDA for our API products in multiple therapeutic areas, out of which 109 DMFs

are active.

Continue to grow our business outside of India and the United States

We intend to continue to grow our sales in existing geographies in Europe, Canada, Australia, South Africa and

Brazil by increasing our existing product portfolio in these markets. Our growth strategy will vary from country

to country depending on applicable regulatory requirements, competition in the product portfolio and

demographics. We intend to capitalise on selected products that we develop for the United States in these markets.

We are hopeful that we will be able to create a strong local presence and expertise with required infrastructure

and develop capabilities in order to grow in these potential markets.

In markets apart from India and the United States, we predominantly sell our products through distributors or

partnerships. In some markets, we work on semi exclusive basis wherein we offer exclusivity for some products

within that market / country. We identify and assess the suitability of potential marketing partners on the basis of

their strengths in that market. We would like to deepen our partnerships in these markets in order to further drive

our marketing efforts. We derived 10.79%, 12.54% and 9.15% of our revenue from operations in Fiscals 2020,

2019 and 2018, respectively, from these countries/regions.

29

SUMMARY OF THE ISSUE

The following is a general summary of the terms of the Issue. This summary should be read in conjunction with,

and is qualified in its entirety by, the more detailed information appearing elsewhere in this Placement Document,

including the sections “Risk Factors”, “Use of Proceeds”, “Placement”, “Issue Procedure” and “Description of

the Equity Shares” on pages 35, 66, 143, 131 and 157, respectively.

Issuer Alembic Pharmaceuticals Limited

Face Value ₹2 per Equity Share

Issue Price ₹932.00 per Equity Share (including a premium of ₹930.00 per Equity

Share)

Discount Our Company has offered a discount of 4.97% amounting to ₹ 48.75,

on the Floor Price in accordance with the approval of the Shareholders

accorded through their resolution dated July 22, 2020 and in terms of

Regulation 176(1) of the SEBI Regulations

Floor Price ₹980.75 per Equity Share, calculated on the basis of Regulation 176 of

the SEBI Regulations.

Issue Size Issue of 80,47,210 Equity Shares, aggregating to approximately

₹750.00 crore.

A minimum of 10% of the Issue Size, i.e., 8,04,721 Equity Shares was

made available for Allocation to Mutual Funds only and the balance

72,42,489 Equity Shares was made available for Allocation to all

Eligible QIBs, including Mutual Funds. In case of under-subscription

in the portion available for Allocation to Mutual Funds, such

undersubscribed portion may be Allotted to other Eligible QIBs.

Date of Board Resolution authorizing the Issue May 22, 2020 and July 27, 2020

Date of Shareholders’ Resolution authorizing

the Issue

July 22, 2020

Eligible Investors Eligible QIBs, to whom the Preliminary Placement Document and the

Application Form have been delivered and who are eligible to bid and

participate in the Issue.

For further details, see “Issue Procedure”, “Selling Restrictions” and

“Purchaser Representations and Transfer Restrictions” on pages 131,

145 and 152, respectively. The list of Eligible QIBs to whom the

Preliminary Placement Document and Application Form have been

delivered, has been determined by our Company in consultation with

the BRLMs.

Equity Shares issued and outstanding

immediately prior to the Issue

18,85,15,914 fully paid-up Equity Shares

Equity Shares issued and outstanding

immediately after the Issue

19,65,63,124 fully paid-up Equity Shares

Issue Procedure This Issue was made only to Eligible QIBs in reliance on Section 42

of the Companies Act, read with Rule 14 of the PAS Rules, and all

other applicable provisions of the Companies Act and Chapter VI of

the SEBI Regulations. For further details, see “Issue Procedure”

beginning on page 131.

Listing and Trading Our Company has obtained in-principle approvals dated August 3,

2020 from BSE and NSE in terms of Regulation 28(1)(a) of the SEBI

Listing Regulations for listing of the Equity Shares to be issued

pursuant to the Issue.

Our Company will make applications to each of the Stock Exchanges

after Allotment and credit of Equity Shares to the beneficiary account

with the Depository Participant to obtain final listing and trading

approval for the Equity Shares, to be issued pursuant to this Issue.

Lock-up For details of the lock-up, see “Placement – Lock-up” on page 143.

Transferability Restrictions The Equity Shares Allotted pursuant to this Issue shall not be sold for

30

a period of one year from the date of Allotment, except on the floor of

a recognised stock exchange. For details in relation to other transfer

restrictions, see “Selling Restrictions” and “Purchaser

Representations and Transfer Restrictions” on pages 145 and 152,

respectively.

Use of Proceeds The gross proceeds from the Issue aggregated to approximately

₹750.00 crore.

The net proceeds from the Issue, after deducting Issue related expenses

is expected to be approximately ₹733.57 crore.

See “Use of Proceeds” on page 66 for information regarding the use

of Net Proceeds from the Issue.

Risk Factors See “Risk Factors” beginning on page 35 for a discussion of risks you

should consider before investing in the Equity Shares.

Indian Taxation See “Statement of Special Tax Benefits” on page 161

Closing Date The Allotment of the Equity Shares is expected to be made on or about

August 7, 2020.

Ranking and dividends The Equity Shares to be issued pursuant to the Issue shall be subject to

the provisions of the Memorandum of Association and Articles of

Association and shall rank pari passu with the existing Equity Shares

of our Company, including rights in respect of dividends.

The Shareholders who hold Equity Shares as on the relevant record

date will be entitled to participate in dividends and other corporate

benefits, if any, declared by our Company after the Bid/Issue Closing

Date, in compliance with the Companies Act, SEBI Listing

Regulations and other applicable laws and regulations. Shareholders

may attend and vote in shareholders’ meetings in accordance with the

provisions of the Companies Act. Please see sections "Dividends" and

"Description of the Equity Shares" on pages 72 and 157, respectively.

Security Codes/ Symbols for the Equity Shares ISIN INE901L01018

BSE Code 533573

NSE

Symbol

APLLTD

31

SELECTED FINANCIAL INFORMATION

The following selected financial information is extracted from and should be read in conjunction with, the Audited

Consolidated Financial Statements of our Company, prepared in accordance with Companies Act and Ind AS and

the applicable rules thereunder, included elsewhere in this Placement Document. You should refer to

“Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Financial

Statements” on pages 73 and 180, respectively, for further discussion and analysis of the Audited Consolidated

Financial Statements of our Company. Wherever comparatives have been included in this section, such

comparatives have been derived from the comparatives in the Audited Consolidated Financial Statements.

SUMMARY OF CONSOLIDATED BALANCE SHEET AS AT MARCH 31, 2020, MARCH 31, 2019, AND

MARCH 31, 2018 (₹ In crore)

Particulars As at March

31, 2020

As at March

31, 2019

As at March

31, 2018

I. ASSETS

(1) Non-Current Assets

(a) Property, Plant and Equipment 1,524.90 1,098.41 927.02 (b) Capital work-in-progress 1,574.10 1,341.40 910.76 (c) Goodwill - 3.61 3.77 (d) Other Intangible assets 26.94 56.43 62.59 (e) Intangible assets under development 272.08 209.83 99.39 (f) Financial Assets: -

(i) Investments 0.45 0.45 0.45

(ii) Investment accounted for using Equity

Method

17.17 48.31 41.19

(g) Other non-current assets 110.66 61.59 71.14 (2) Current Assets

(a) Inventories 1,187.53 967.26 733.93 (b) Financial Assets

(i) Trade receivables 864.75 488.92 526.34 (ii) Cash and cash equivalents 71.84 199.07 83.74

(iii) Bank balances other than cash and cash

equivalents

8.91 6.55 6.18

(iv) Others financial assets 8.65 9.10 29.97 (c) Current Tax Assets (Net) 30.98 - 3.45 (d) Other current assets 290.08 286.86 441.13 TOTAL ASSETS 5,989.05 4,777.79 3,941.05

II EQUITY AND LIABILITIES

EQUITY

(a) Equity Share capital 37.70 37.70 37.70 (b) Other Equity 3,181.71 2,681.12 2,182.44 Equity attributable to owners of the Company 3,219.41 2,718.82 2,220.14 Non-controlling interests (28.96) (0.79) 0.31 Total Equity 3,190.45 2,718.04 2,220.45 LIABILITIES

(1) Non-Current Liabilities

(a) Financial Liabilities

(i) Borrowings 886.99 499.30 500.00 (ii) Other financial liabilities 73.30 - - (b) Provisions 74.51 52.03 40.76 (c) Deferred tax liabilities (Net) 12.19 18.74 35.44 (2) Current liabilities

(a) Financial Liabilities

(i) Borrowings 860.50 429.13 207.78 (ii) Trade payables

A) Total outstanding dues of Micro and Small

enterprises

7.11 5.09 0.32

B) Total outstanding dues of others 618.82 639.25 759.00 (iii) Other financial liabilities 121.92 292.19 19.59 (b) Other current liabilities 105.06 87.99 123.29 (c) Provisions 38.19 32.39 34.41 (d) Current Tax Liabilities (Net) - 3.61 - TOTAL EQUITY AND LIABILITIES 5,989.05 4,777.79 3,941.05

32

SUMMARY OF CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE FISCALS

ENDED MARCH 31, 2020, MARCH 31, 2019 AND MARCH 31, 2018

(₹ In crore)

Particulars

For the year

ended March

31, 2020

For the Year

Ended on

March 31,

2019

For the Year

Ended on

March 31, 2018

I Revenue from Operations 4,605.75 3,934.68 3,130.81

II Other Income 4.94 9.38 7.03

III Total Income 4,610.69 3,944.06 3,137.84

IV Expenses

Cost of Materials Consumed 979.05 850.04 725.75 Purchase of Stock-in-Trade 270.93 234.93 201.87 Changes in Inventories of Finished Goods, Stock-in-

Trade, and Work in Progress

(210.59) (92.27) (42.06)

Employee Benefits Expense 906.44 746.69 622.81 Finance costs 27.16 18.41 3.40 Depreciation and amortization expense 157.32 115.23 105.46 Other Expenses 1,436.89 1,321.71 979.34 Total Expense (IV) 3,567.22 3,194.74 2,596.57

V Profit Before Tax (III-IV) 1,043.47 749.32 541.27

VI Exceptional Items 43.65

VII Profit Before Tax (V-VI) 999.82 749.32 541.27

VIII Tax Expense

(i) Current Tax 204.57 178.14 123.61 (ii) Deferred Tax (4.30) (17.29) (2.16) (iii) Short/Excess Tax Provision (1.09) (4.10) (1.10)

IX Profit after Tax Before Share of Profit of Associate

and Joint Venture (VII-VIII)

800.64 592.57 420.91

X Share of Profit/(Loss) of an associate and a joint

venture

0.05 (9.28) (8.09)

XI Profit for the period before Non-controlling Interest

(IX+X)

800.70 583.29 412.82

XII Non- controlling Interest 28.12 1.08 (0.19)

XIII Profit for the period attributable to Owners of the

Company

828.82 584.37 412.63

XIV Other Comprehensive Income

A Items that will not be reclassified to Profit and

Loss

(i) Re-measurements of post-employment benefit

obligations

(11.42) (2.47) (3.89)

(ii) Income tax relating to Re-measurements of

post-employment benefit obligations

1.97 0.53 0.83

(9.46) (1.93) (3.06) B Items that will be reclassified to Profit or Loss

(i)Exchange differences in translating the financial

statements of a foreign operations

7.64 7.76 (0.14)

7.64 7.76 (0.14) Total Other Comprehensive Income (A+B) (1.82) 5.83 (3.20)

XV Total Comprehensive Income for the year (IX+XII) 798.88 589.12 409.63 Other Comprehensive Income for the year

Attributable to:

(i) Non- controlling Interest (0.05) (0.01) - (ii) Owners of the Company (1.77) 5.84 (3.20) Total Comprehensive Income for the year

Attributable to:

(i) Non- controlling Interest (28.17) (1.09) 0.19 (ii) Owners of the Company 827.05 590.21 409.43

XVI Earnings per equity share (face value ` 2/- per share):

Basic & Diluted (in `) 43.97 31.00 21.89

33

SUMMARY OF CONSOLIDATED CASH FLOW STATEMENT FOR THE FISCALS ENDED 31

MARCH 2020, MARCH 31, 2019 AND MARCH 31, 2018

(₹ In crore)

Particulars

For the year

ended March

31, 2020

For the year

ended

March 31,

2019

For the year

ended March

31, 2018

A CASH FLOW FROM OPERATING ACTIVITIES:

Net Profit before tax after exceptional item 999.82 749.32 541.27 Adjustments for:

Depreciation and amortisation 157.32 115.23 105.46 Interest charged 27.16 18.41 3.40 Interest Income (1.73) (2.58) (0.62) Dividend Income /Gain on Sale of Investments (0.93) (2.12) (0.75) Unrealised foreign exchange gain (net) 15.95 (23.83) (15.62) Provision / write off for doubtful trade receivables 8.55 16.69 0.07 Impairment goodwill and other intangible assets 53.71 - - Impairment in value of investments, net 33.65 - - Sundry balances written Back (net) (2.82) (0.58) - Remeasurement of Defined benefit obligations (11.42) (2.47) - Loss/(Profit) on sale of Asset (1.16) (1.18) (4.82) Operating Profit before change in working capital 1,278.09 866.88 628.39 Working capital changes:

(Increase) In Inventories (220.27) (233.33) (101.18) (Increase)/Decrease in Trade Receivables (358.26) 36.19 (184.18) (Increase)/Decrease in Other Assets (18.95) 175.13 (217.64) (Decrease) In Trade Payables (21.11) (50.31) 258.84 Increase /(Decrease) In Other Liabilities (2.52) 177.09 61.60 Increase in Provisions 28.27 6.79 1.71 Cash generated from operations 685.24 978.45 447.53 Direct taxes paid (Net of refunds) (236.11) (166.48) (135.11) Net Cash inflow from Operating Activities (A) 449.13 811.96 312.42

B CASH FLOW FROM INVESTING ACTIVITIES:

Proceed from sale of assets 0.60 1.28 14.40 Government assistance - 17.15 - Interest received 1.73 2.58 0.62 Dividend /Gain on Sale of Investments received 0.93 2.12 0.75 Purchase of Property, Plant & Equipments and Capital

Advance

(672.65) (653.93) (749.36)

Investment in Associate - (14.36)

Net cash outflow on acquisition of Subsidiary

(78.41)

Intangible assets under development (62.25) (110.44) (72.39) Net Cash inflow from Investing Activities (B) (731.63) (755.60) (884.38)

C CASH FLOW FROM FINANCING ACTIVITIES:

Proceeds from borrowings 378.02 603.70 619.05 Repayment of borrowings (200.00) (604.39)

Net increase / (decrease) in working capital demand loans 431.37 221.35 - Payment of lease liabilities (17.49) -

Increase in Restricted Bank Balances other than Cash &

Cash Equivalents

(0.02) (0.38) 0.35

Dividends paid (including distribution tax) (325.97) (90.91) (90.76) Interest and other finance costs (including borrowing cost

capitalised)

(111.06) (70.34) (26.02)

Net Cash inflow from Financing Activities (C) 154.85 59.04 502.63

I. Net (decrease)/increase in cash and cash equivalents

(A+B+C)

(127.64) 115.40 (69.34)

II. (a) Cash and cash equivalents at the beginning of the

Year

199.07 83.74 153.08

(b) Effect of exchange differences on restatement of

foreign currency cash and cash equivalents

0.41 (0.07) -

III. Cash and cash equivalents at the end of the Year (I+II) 71.84 199.07 83.74

IV. Cash and cash equivalents at the end of the Year

Balances with Banks 71.48 198.84 83.41

34

Particulars

For the year

ended March

31, 2020

For the year

ended

March 31,

2019

For the year

ended March

31, 2018

Cash on hand 0.36 0.23 0.34 Cash and cash equivalents 71.84 199.07 83.74

35

RISK FACTORS

This section should also be read together with the sections titled “Our Business”, “Industry Overview”,

“Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and “Financial

Statements” on pages 73, 93, 106 and 180 respectively, as well as the other financial information included in this

Placement Document.

An investment in equity shares involves a high degree of risk. Investors should carefully consider all the

information disclosed in this Placement Document, including the risks and uncertainties described below, before

making any investment decision relating to the Equity Shares or the Issue. The risks described below are those

that we consider to be the most significant to our business, results of operations and financial conditions as on

the date of this Placement Document. However, these are not the only risks relevant to us or the Equity Shares or

the pharmaceutical sector in which we currently operate. Additional risks and uncertainties, not presently known

to us or that we currently deem immaterial may also impair our business prospects, results of operations and

financial condition in the future. If any or some combination of the risks described below, or other risks that are

not currently known or are currently deemed immaterial actually occur, our business prospects, results of

operations and financial condition could be adversely affected, the trading price of the Equity Shares could

decline, and investors may lose all or part of the value of their investment.

Any potential Investor should pay particular attention to the fact that we are subject to a highly regulated sector

in India and abroad. The financial and other related implications of the risk factors, wherever quantifiable, have

been disclosed in the risk factors mentioned below. However, there are certain risk factors where the financial

impact is not quantifiable and, therefore, cannot be disclosed in such risk factors. In making an investment

decision, prospective investors must rely on their own examination of us on a consolidated basis and the terms of

the Issue, including the merits and risks involved. Investors should consult their respective tax, financial and legal

advisors about the particular consequences of an investment in this Issue.

This Placement Document also contains forward-looking statements that involve risks and uncertainties. Our

actual results could differ materially from those anticipated in these forward-looking statements as a result of

certain factors, including the considerations described below and elsewhere in this Placement Document. For

further information, see “Forward-Looking Statements” on page 14.

INTERNAL RISK FACTORS

1. The pharmaceutical industry is heavily regulated and our business activities require various approvals,

licenses, registrations and permissions, both in domestic as well as in overseas jurisdictions in which we

operate. If there is any change to such regulatory architecture to our disadvantage, our business,

financial condition and results of operations may be adversely affected.

The development, testing, manufacturing, marketing and sale of pharmaceutical products are subject to

extensive regulation in India as well as in overseas jurisdictions in which we operate. Our products, as well

as the facilities where we manufacture them, require extensive testing, government reviews and approvals

before they can be marketed. To conduct our business, we need product registrations and other approvals

granted by authorities in India, the United States and various other countries’ foreign governmental

authorities and health regulatory bodies. The cost and time taken to acquire such authorizations and

approvals in a timely and regular manner is substantial. Governmental authorities in India, the United States

and other countries to which we supply our products, impose different rules and regulations on research,

development, manufacture, and testing to ensure the safety of pharmaceutical products. There can be delays

in obtaining required clearances from regulatory authorities of these countries after applications are filed,

especially in the U.S.A, wherein lies a significant portion of our operations. Whether or not a product is

approved in India, regulatory authorities in most of the markets to which we export products must approve

that product before we can begin to supply it to those countries. Any failure or delay in obtaining regulatory

approvals, or the implementation of any new standards or conditions for obtaining such approvals, or

maintaining or renewing the existing permits and approvals, could impact the supply and marketing of our

products in a timely manner and, in turn, affect our financial condition and results of operations. Further,

failure to maintain compliance with regulatory requirements may also result in administrative actions, such

as fines, warning letters, refusal to approve pending applications (including ANDA filings), product

seizures, refusal to permit the import of products into the destination country, or restrictions on marketing

or manufacturing. For risks associated with failure to renew, maintain or obtain permits or approvals

required to operate our manufacturing facilities and sale of products in India, see “We require a large

36

number of approvals and licenses in the ordinary course of business, and the failure to obtain or retain

them in a timely manner may adversely affect our business and financial condition and results of

operations” on page 47. Additionally, existing regimes in relation to available tax benefits are subject to

change unfavorably in the future, which may in turn adversely affect our business prospects in India and in

overseas jurisdictions.

Further, there may also be uncertainty relating to pricing and other regulations which vary widely from

country to country. The regulations applicable to our existing and future products may also change. Any

change in the regulations, enforcement procedures or regulatory policies set by the USFDA, MHRA (U.K),

TGA (Australia), ANVISA (Brazil), DCGI (CDSCO, India) , HPCD (Canada), EDQM, Bahagian

Regulatori Farmasi Negara (Malaysia) and other regulatory agencies could increase the costs or time of

development of our products and delay or prevent sales of our products. We cannot determine what effect

changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or

adopted, may have on our business in the future.

2. In the United States and many of the international markets in which we sell our products, the approval

process for a new product can be complex, lengthy and expensive. If we fail to obtain such approvals in

a timely and cost efficient manner, or at all, our business, prospects, results of operations and financial

condition could be adversely affected.

Our international generics business contributed to 53.69% of our total revenue from operations as on March

31, 2020. In the United States and many of the international markets in which we sell our products, the

approval process for a new product can be complex, lengthy and expensive. The time taken to obtain

approvals varies by country but generally takes between six months and several years from the date of

application.

If we fail to comply with applicable statutory or regulatory requirements, there could be a delay in the

submission or grant of approval for marketing new products. Moreover, if we fail to comply with the

conditions attached to such approvals, licenses, registrations and permissions once received, the relevant

regulatory body may suspend, curtail or revoke our ability to market such products. Further, we may be

required to defend our applications in a legal proceeding or otherwise, which may lead to an increase in

time or costs for obtaining such approvals. If we fail to obtain such approvals, licenses, registrations and

permissions, in a timely and cost efficient manner or at all, our business, prospects, results of operations

and financial condition could be adversely affected.

Further, we market our products in various countries overseas, where we are subject to risks related to

complying with a wide variety of local laws, including restrictions on the import and export of certain

intermediates, drugs, technologies and multiple and possibly overlapping tax structures. In many

jurisdictions, the regulatory requirements are still evolving and are subject to changes which may, at times,

be unclear or inconsistent. If we fail to comply with such regulations, it could lead to restrictions on sale of

products, enforced shutdowns and other sanctions imposed by relevant authorities, as well as the

withholding or delay in receipt of regulatory approvals for our new products.

3. Our markets are highly competitive, both globally and domestically, and if we are unable to compete

successfully against existing or new competitors, our revenues could decline and our future profitability

could be affected.

The international generics market and the domestic formulations markets are both highly competitive.

Players in these industries face high entry barriers such as high capital investments, operational costs,

manufacturing complexities, stricter compliance requirement (because of the sterile nature of products) and

high-quality standards resulting in limited competition in the market. Growing competition in the domestic

and/or international markets may subject us to pricing pressures and require us to reduce the prices of our

products and services in order to retain or attract customers, which may have a material adverse effect on

our revenues and profit margins. Our competitors may have access to greater financial, marketing, technical

and other resources. As a result, they may be able to devote more resources to the research and

development, manufacture, marketing and sale of their products, receive more support from independent

distributors, initiate or withstand substantial price competition or more readily take advantage of acquisition

or other opportunities.

In addition to competition from established market participants, new entrants to the markets in which we

37

operate, could substantially reduce our market share or make our products commercially unviable. Most of

our international products are generic versions of branded products and we are dependent on the loss of

patent protection and exclusivity of such products for the commercialization of our products. As patents

for branded products and related exclusivity periods expire or are ruled invalid, the first generic

pharmaceutical manufacturer to receive regulatory approval for a generic version of the reference product

is generally able to achieve significant market penetration and higher margins on that product as such

manufacturer will be granted a 180-day period of marketing exclusivity by the USFDA. As competing

generic manufacturers receive regulatory approval on specific product, market share, revenue and gross

profit typically decline for the original generic entrant. In addition, as more competitors enter into a specific

generic market, the average selling price per unit dose of the particular product typically declines for all

competitors. Our ability to sustain our level of market share, revenue and gross profit attributable to a

particular generic pharmaceutical product is significantly influenced by the number of competitors in that

product’s market and the timing of that product’s regulatory approval and launch in relation to competing

approvals and launches.

The launch of our generic products could also be delayed because branded drug manufacturers may, among

other things: make last minute modifications to existing product claims and labels, thereby requiring

generic products to reflect this change prior to the drug being approved and introduced in the market; file

new patents for existing products prior to the expiration of a previously issued patent, which could extend

patent protection for additional years; file patent infringement suits which may result in delay for a specific

period in the approval of generic versions by the relevant authorities; develop and market their own generic

versions of their products, either directly or through other generic pharmaceutical companies, which are

known as authorised generics; make changes in the overall product formulation, which would require fresh

development and approval processes for such products; and switch product availability from a prescription-

only to an over-the-counter basis, which would require relabeling and further regulatory approvals.

4. Any manufacturing or quality control problems may damage our reputation and expose us to litigation

or other liabilities, which could adversely affect our results of operations and financial condition.

We are required to meet stringent quality standards and specifications for manufacturing and storage of our

products. We are liable for the quality of our products for the entire duration of the shelf life of the product

and are exposed to claims resulting from quality control issues including manufacturing defects or

negligence in storage or handling, which may lead to the deterioration of our products.

In certain foreign jurisdictions, the quantum of damages, especially punitive, awarded in cases of product

liability can be extremely high. After our products reach the market, certain developments could adversely

affect demand for our products, including the regulatory review of products that are already marketed, new

scientific information, greater scrutiny in advertising and promotion, the discovery of previously unknown

side effects or the recall or loss of approval of products that we manufacture, market or sell.

The existence, or even threat, of a major product liability claim could damage the brand image of our

products, our reputation and affect consumers’ views of our other products. These and any other adverse

associations with our products, including with respect to their efficacy, side effects, regulatory actions

against our products, and adverse publicity arising thereto, may adversely affect our business, results of

operations and financial condition. Any loss of our reputation or brand image may adversely affect our

ability to enter into additional business contracts in the future.

For further details, please refer to “We are susceptible to product liability claims and associated risks of

litigation that could expose us to material liabilities, loss in revenues and increased expenses and thus may

have a material adverse effect on our business and financial condition. Failure to obtain product liability

insurance may result in us being compelled to pay substantial damages” on page 38.

5. Our success is dependent on our sales and distribution arrangements with our distributors and

customers for the sale of our products. If any of these arrangements is terminated for any reason, or if

our distributors or marketing partners fail to fulfill their obligations under the relevant agreements or

otherwise do not effectively sell or market our products, or if our relationships with any of our

distributors and customers are disrupted, our business, financial condition and results of operations may

be adversely affected.

In India, we supply products to distributors. In markets such as the United States and Europe, our primary

business model is B2B. We market and distribute our products either directly through our Subsidiaries or

38

indirectly, through supply, distribution and other arrangements with various global companies and local

distributors.

In relation to our B2B business model, our success in many markets depends on our B2B distributors, in

particular their sales expertise and relationships with their end customers. Accordingly, the performance of

our distributors and their ability to reach out to treatment providers and promote our products are crucial

to the future growth of our business. Our distributors may not continue to be successful in marketing and

promoting our products. They may terminate their relationships with us, or may fail to commit the

necessary resources to purchase and market our products to the level of our expectations. Our customers

also can terminate their agreement with us for a particular product if the market authorisation cannot be

obtained by such customer due to a technical deficiency or a breach of other obligations attributed to the

dossier owned by the Company. Our reliance on our distributors may also make it more difficult for us to

accurately forecast the results of our operations.

Our dependence on partnerships with our B2B distributors to market some of our products may subject us

to a number of risks, including:

• not being able to control the amount and timing of resources that these partners may devote to the

marketing of our products; and

• significant changes in their business strategy that may adversely affect their willingness or ability to

fulfill its obligations under any arrangement.

Additionally, the B2B distributors we work with may make important marketing and other commercial

decisions concerning our products without our input. As a result of these arrangements, some of the

variables that may affect our business are not exclusively within our control. Further, our arrangements

with these partners may be terminated upon breach of contractual obligation. We may not be able to

renegotiate these contract arrangements on reasonable terms or find suitable alternatives in the future. In

addition, if we fail to maintain our relationships with these distributors, or they decide to increase their in-

house development or production capabilities, licensing of and marketing for our products and pipeline

could be adversely affected, demand for our products could decrease and our business could be materially

and adversely affected. As a result, our reliance on, and inability to control these B2B distributors on whom

we rely for the sale and marketing of our products could adversely affect our business, financial condition

and results of operations.

6. If our API production is interrupted or we fail to produce or procure high-quality API in the quantities

we require in a cost-effective manner, sales of our products could be delayed or interrupted.

The manufacture of APIs is complex, and we may experience problems during the manufacture of APIs

for a variety of reasons, including equipment malfunction, failure to follow specific protocols and

procedures, manufacturing quality concerns, problems with raw materials, lack of technical know-how,

natural disaster related events or other environmental factors. If our vendors fail to provide the raw

materials or technical know-how required for APIs for any reason, or supply to our competitors, our

manufacture of APIs could be disrupted, which in turn may delay or interrupt the production of our

formulations. Similarly, if any approval or license for our APIs production facilities is suspended, the

production and supply of APIs could be adversely affected. We also procure APIs that are not manufactured

in-house by us externally from our vendors If, for any reason, we are unable to produce ourselves or procure

from our vendors sufficient quantities of APIs on a timely basis (including for reasons beyond our

reasonable control), the manufacture or supply of our products or exhibit batches could be disrupted, which

may decrease our sales revenue or otherwise negatively impact our operations. Additionally, if we are

unable to continue to produce APIs in a relatively cost-effective manner for reasons such as increases in

the material input costs and labour costs, the increased production cost may erode some of our competitive

advantage, increase our operating expenses and reduce our profit margins.

7. We are susceptible to product liability claims and associated risks of litigation that could expose us to

material liabilities, loss in revenues and increased expenses and thus may have a material adverse effect

on our business and financial condition. Failure to obtain product liability insurance may result in us

being compelled to pay substantial damages.

Our business exposes us to claims for injuries allegedly resulting from the use of our products. We may be

held liable for, or incur costs related to, liability claims if any of our products causes injury or is found

39

unsuitable during development, manufacture, sale or use. These risks exist even with respect to products

that have received, or may in the future receive, regulatory approval for commercial use. For example, our

products may have expired or cause side-effects to consumers or lack adequate efficacy. In the event our

products cause or are perceived to cause severe side effects, the sales of such products may decrease, which

may have an adverse effect on our revenues and profitability.

We have experienced cases of voluntary product recalls in the last ten years. In a recent case of a voluntary

product recall in June 2020, 19,153 bottles of Aripiprazole tablets marketed by us in the US, were recalled

by us for a labelling mix up. In foreign jurisdictions, such as the United States, in which we intend to

expand further for future sale and distribution of our products, precedents show that the quantum of

damages, especially punitive, awarded in cases of product liability is extremely high. Deterioration in our

quality controls could also result in product liability claims against us.

Actual or claimed defects in our manufacturing facilities and/or product quality could give rise to claims,

liabilities, costs and expenses, relating to loss of life, personal injury, damage to property, damage to

equipment and facilities, inefficient operating processes, loss of production or suspension of operations. If

a supplier fails to meet quality standards, it could also expose us to the risk of product liability claims. If

we cannot successfully defend ourselves against product liability claims, we may incur substantial

liabilities. The consequential liabilities and costs could have a material adverse effect on our business,

financial condition and results of operations. Moreover, while our Company maintains a comprehensive

general liability insurance, which covers product liability claims, any unsuccessful product liability claims

would likely require us to spend money on litigation, divert management’s time, damage our reputation

and impair the marketability of our products.

8. The COVID-19 pandemic, or any future pandemic or widespread public health emergency, could

materially and adversely impact our business, financial condition and results of operations.

Since first being reported in December 2019, the outbreak of COVID-19 has spread globally. The World

Health Organization declared the outbreak of COVID-19 to be a public health emergency of international

concern on January 30, 2020, and a global pandemic on March 11, 2020.

The COVID-19 pandemic has had, and any future pandemic or widespread public health emergency could

have, repercussions across regional and global economies and financial markets. The outbreak of COVID-

19 in many countries, including India and the United States, has significantly and adversely impacted

economic activity and has contributed to significant volatility and negative pressure in financial markets,

and it is possible that the outbreak of COVID-19 will cause a prolonged global economic crisis, recession

or depression, despite monetary and fiscal interventions by governments and central banks globally.

While we believe that our business has not been adversely impacted by the current wave of the pandemic,

the global impact of the outbreak has been rapidly evolving. As cases of COVID-19 have continued to be

identified in additional countries, many jurisdictions, including the governments of India, the United States

and the other markets in which we conduct business, have reacted by instituting restrictive measures

including invoking lock downs and quarantines, requiring the closure of non-essential businesses and

placing restrictions on the types of businesses that may continue to operate, mandating restrictions on travel,

implementing “shelter-in-place” rules and “stay-at-home” orders, and enforcing remote working

regulations. No prediction can be made of when any of the restrictions currently in place will be relaxed or

expire, or whether or when further restrictions will be announced. Although some governments are

beginning to ease or lift these restrictions, the impacts from the severe disruptions caused by the effective

shutdown of large segments of the global economy remain unknown.

On March 24, 2020, the Government of India ordered a national lockdown in response to the spread of

COVID-19. Our business was determined to be operating in an essential industry, which allowed us to

continue our operations subsequent to the introduction of the lockdown in India, subject to certain

adjustments in working patterns, however, there can be no assurance that further restrictions will not be

introduced or that we will continue to retain such essential status.

There can be no assurance that there will not be any material impact on our operations if the outbreak of

COVID-19 is not effectively controlled. Further, we may be required to quarantine employees that are

suspected of being infected of COVID-19, as well as others that have come into contact with those

employees or shut down our manufacturing facilities which could have an adverse effect on our business

40

operations. If any of our suppliers (including suppliers from whom we source raw materials from

international markets) are affected by COVID-19 to the extent our supply chain is disrupted, this may affect

our ability to meet the demand of our customers.

The full extent to which the COVID-19 pandemic, or any future pandemic or widespread public health

emergency impacts our business, operations and financial results will depend on numerous evolving factors

that we may not be able to accurately predict at this time, including: the scope, severity, and duration of the

pandemic; actions taken by governments, business and individuals in response to the pandemic; the effect

on customer demand for and ability to pay for our products; the impact on our capital expenditure and drug

development projects; disruptions or restrictions on our employees’ and suppliers’ ability to work and

travel; volatility in foreign exchange rates; any extended period of remote work arrangements; and strain

on our or our customers’ business continuity plans, and resultant operational risk.

9. Decreased opportunities to obtain United States market exclusivity products may adversely affect our

revenues and profits.

In the United States, we aspire to focus on those formulations/products which are either difficult to

formulate / manufacture and has limited competition. We derived 42.90%, 32.73% and 29.39% of our

revenue from operations during Fiscals 2020, 2019 and 2018, respectively, from the formulations sales

within the United States. Our ability to achieve continued growth and profitability through sales of generic

pharmaceuticals is dependent on our success in challenging patents, developing non-infringing products or

developing products with increased complexity to provide opportunities with United States market

exclusivity or limited competition. The failure to continue to develop such opportunities could adversely

affect our sales and profitability. To the extent that we succeed in being the first to market a generic version

of a branded product, and particularly if we are the only company authorized to sell during the 180-day

period of exclusivity granted by the USFDA, as provided under the Drug Price Competition and Patent

Term Restoration Act of 1984 (the “Hatch-Waxman Act”), our sales, profits and profitability can be

substantially increased in the period following the introduction of such product and prior to a competitor’s

introduction of an equivalent product. Even after the exclusivity period ends, there is often continuing

benefit from being the first generic product in the market. However, we believe that the number of

significant new generic products for which exclusivity is available, and the size of those product

opportunities, has decreased in recent years. Additionally, increasingly we share the 180-day exclusivity

period with other generic competitors, which diminishes the commercial value of the exclusivity. The 180-

day market exclusivity period is triggered by commercial marketing of the generic product or, in certain

cases, can be triggered by a final court decision that is no longer subject to appeal holding the applicable

patents to be invalid, unenforceable or not infringed. However, the exclusivity period can be forfeited by

our failure to obtain tentative approval of our product within a specified statutory period or to launch a

product following such a court decision. The Hatch-Waxman Act also contains other forfeiture provisions

that may deprive the first Paragraph IV filer of exclusivity if certain conditions are not met, some of which

may be outside our control. Accordingly, we may face the risk that our exclusivity period is forfeited before

we are able to commercialize a product and therefore may not be able to exploit a given exclusivity period

for specific products.

10. We derive a significant portion of our revenues from operations in the United States market, from a few

customers. A loss of one or more such significant customers or a reduction in their demand for products

could adversely affect our business, financial condition and results of operations.

We derive a significant portion of our net revenues from operations in the United States market from a few

customers. The loss of one or more of these significant customers or a reduction in the amount of business

we obtain from them could have an adverse effect on our business, financial condition and results of

operations. We cannot assure you that we will be able to maintain historic levels of business from our

significant customers or that we will be able to significantly reduce customer concentration in the future.

11. We may not be able to sustain effective implementation of our business and growth strategy, which may

adversely affect our business and results of operations.

The success of our business will depend greatly on our ability to effectively implement our business and

growth strategy. For further details, please see “Our Business – Our Strategies” on page 109.

In pursing our growth strategy, we will require additional capital investments and cash outlays, which may

have a material impact on our results of operations. As our product portfolio and product pipeline grow,

41

we may require additional personnel on our project management, in-house quality assurance and R&D

teams to work with our partners on quality assurance, regulatory affairs and product development. As a

result, our operating expenses and capital requirements may increase significantly. Our ability to manage

our growth effectively requires us to forecast accurately our sales, growth and manufacturing capacity and

to expend funds to improve our operational, financial and management controls, reporting systems and

procedures. We may also be exposed to certain other risks, including difficulties arising from operating a

larger and more complex organisation; the failure to (i) efficiently and optimally allocate management,

technology and other resources across our organisation, (ii) compete effectively with competitors and (iii)

increase our production capacity; the inability to control our costs; and unforeseen legal, regulatory,

property, labour or other issues.

For instance, as we continue our growth by expanding our manufacturing facilities and introducing new

products, the construction of new manufacturing facilities and the expansion of existing manufacturing

facilities are capital intensive, require significant time and are subject to certain risks that could result in

delays or cost overruns, which could require us to expend additional capital and adversely affect our

business and operating results. Such potential events include shortages and late delivery of building

materials and facility equipment; delays in the delivery, installation, commissioning and qualification of

our manufacturing equipment; seasonal factors, such as a long and intensive wet season that limits

construction; labour disputes; design or construction changes with respect to building spaces or equipment

layout; delays or failure in securing the necessary governmental approvals, building sites or land use rights;

and technological capacity and other changes to our plans for new manufacturing facilities necessitated by

changes in market conditions. Delays in the construction or expansion of any of our manufacturing facilities

could result in a loss or delayed receipt of earnings and an increase in financing costs which would

adversely affect our business and results of operations.

Additionally, if our existing manufacturing facilities are harmed or rendered inoperable by factors such as

increased competition as more players enter into these geographies, general economic conditions, laws and

regulations, both Indian and international, and other natural or man-made disasters, including earthquakes,

fire, floods, acts of terrorism and power outages, it may render it difficult or impossible for us to efficiently

operate our business for some time, or require us to shut major part of our operations, which may adversely

affect our business, financial condition, result of operations and cash flows. For instance, in Fiscal 2018, a

fire broke out in our facility in Algeria, maintained through our Joint Venture, Alembic Mami SPA, leading

to a complete destruction of the facility. Subsequently, in Fiscal 2020, our Company has fully provided for

the diminution in value of investment in Alembic Mami SPA. Our Company does not carry any further

liability towards Alembic Mami SPA or third party on account of this arrangement. We cannot assure you

that any such future force majeure instances will not have a material adverse effect on our business,

financial condition, result of operations.

There can be no assurance that our growth strategy will be successfully implemented or completed or that

if completed, they will result in the anticipated growth in our revenues or improvement in our results of

operations. We also cannot assure you that we will be able to continue to expand further, or at the same

rate. Our ability to invest in overseas or Indian companies may be constrained by Indian and foreign laws.

Further, we expect our growth strategy to place significant demands on our management, financial and

other resources and require us to continue developing and improving our operational, financial and other

internal controls. We cannot assure you that our existing or future management, operational and financial

systems, procedures and controls will be adequate to support future operations or establish or develop

business relationships beneficial to future operations. Failure to manage growth effectively may have an

adverse effect on our business, results of operations and prospects.

12. We intend to selectively pursue Paragraph IV filing opportunities in the United States, which may not

be successful, may result in extensive and expensive litigation which we may not be successful in

defending, and which may adversely affect our business, prospects, results of operations and financial

condition.

A Paragraph IV filing in the United States is made when an ANDA applicant believes its product or the

use of its product does not infringe on patents or where the applicant believes that such patents are not valid

or enforceable. If successful, Paragraph IV filings enable the filer to launch the product in the United States

prior to the expiry of the patent and could include the grant of a 180 day exclusivity period for marketing

the generic product. These products are often difficult and expensive to manufacture. Innovators will often

seek to restrict or will challenge the grant of a successful Paragraph IV filing which, if determined against

42

the ANDA applicant, may result in expensive litigation.

We may elect to market a generic product before any court decision is rendered or while an appeal from a

lower court decision is pending. If the final court decision is adverse to us, we could be required to cease

sales of the infringing products and face substantial liability for patent infringement. These damages may

be significant as they may be measured differently in various jurisdictions, including by royalties on our

sales or by the profits lost by the patent owner.

13. Our business success depends on the strength of our brand, product image and reputation. Any failure

to maintain and enhance, or any damage to, our brand, product image or reputation could materially

and adversely affect the level of market recognition of, and trust in, our products.

We consider that our success depends to a significant extent on our brand, product image and reputation.

If we or those distributors who operate under our brand fail to maintain and enhance, or if there is any

damage to, our or our distributors’ brand image or reputation, the demand for our products may be

materially and adversely affected.

Many factors that are important to maintaining and enhancing our brand, product image and reputation are

not entirely within our control, and such factors may materially and adversely affect our brand, product

image and reputation. Such factors include, among other things, our ability to continue to:

• effectively control our product quality and effectiveness;

• increase brand recognition among existing and potential customers through various means of

marketing and promotional activities; and

• effectively protect our trademarks and trade names.

Furthermore, any negative publicity in relation to our products can damage our brand, product image and

reputation. It is an inherent business risk that the treatments using our products may lead to undesirable or

unexpected outcomes, including complications, injuries and even deaths in extreme cases. Such undesirable

or unexpected outcomes may lead to complaints, claims, and/or legal actions against us which may

materially and adversely affect our brand, product image and reputation.

14. We rely substantially on Alembic Pharmaceuticals Inc, our subsidiary in the United States, to generate

earnings from the United States and any decline in its earnings could adversely affect our results of

operations.

We undertake a significant volume of our operations in the United States through Alembic Pharmaceuticals

Inc, our subsidiary, on whom we are entirely dependent for our business earnings at a consolidated level.

We cannot assure you that our Material Subsidiary will generate sufficient earnings and cash flows to pay

dividends or otherwise distribute sufficient funds to enable us to meet our obligations, pay interest and

expenses or declare dividends.

15. We have incurred significant capital expenditure during the last three Fiscals.

During Fiscal 2020, 2019 and 2018, we incurred capital expenditure of ₹ 897.48 crore, ₹ 818.27 crore and

₹ 922.83 crore, respectively. A significant amount of our capital expenditure was aimed at increasing our

manufacturing and research capabilities and capacities.

There can be no assurance that our expansion plans will be implemented as planned or on schedule, or that

we will achieve our increased planned output capacity or operational efficiency. If we experience

significant delays or mishaps in the implementation of the expansion plans or if there are significant cost

overruns, then the overall benefit of such plans to our revenues and profitability may decline. To the extent

that the planned expansion does no produce anticipated or desired output, revenue or cost-reduction

outcomes, our profitability and financial condition will be adversely affected.

16. Our ability to invest in overseas subsidiaries and joint ventures may be constrained by Indian and foreign

laws, which could adversely affect our growth strategy and business prospects.

Under Indian foreign investment laws, an Indian company is permitted to invest in overseas joint ventures

43

or wholly owned subsidiaries, upto a certain specific threshold of the Indian company's net worth as at the

date of its last audited balance sheet (subject to certain exceptions), and any financial commitment

exceeding USD 1 billion (or its equivalent) in a financial year will require prior approval of the RBI, even

if the total financial commitment of the Indian company is within the aforementioned limit. This limitation

also applies to any other form of financial commitment by the Indian company, including in terms of any

loan, guarantee or counter guarantee issued by such Indian company. Further, there may be limitations

stipulated in the host country for foreign investment.

Investment or financial commitment not complying with the stipulated requirements is permitted with prior

approval of the RBI. Additionally, there are also further requirements specified under the Companies Act,

2013 in relation to any acquisition that we propose to undertake in the future. These limitations on overseas

direct investment could constrain our ability to acquire or increase our stake in overseas entities as well as

to provide other forms of financial assistance or support to such entities, which may adversely affect our

growth strategy and business prospects.

17. If we are unable to protect our intellectual property and proprietary information (including process

patents and trademarks), or if we infringe the intellectual property rights of others, our business,

financial condition and results of operations may be adversely affected.

As of June 30, 2020, we owned 574 registered trademarks, including our logo. We have trademark

applications pending, any of which may be subject to governmental or third-party objection, which could

prevent the maintenance or issuance of the same. Further, we also market certain products wherein we have

not obtained any trademark protection. While we are a generics player, we also enjoy a certain degree of

process patent protection. We have been granted 911 patents worldwide (for both APIs and formulations),

including patents which have been withdrawn, abandoned or have lapsed, as of March 31, 2020.

We may not always be able to safeguard our intellectual property from infringement or passing off, both

domestically and internationally, since we have operations in several countries and may not be able to

respond to infringement or passing off activity occurring without our knowledge. Further, we are also

subject to the risk arising from our patents being challenged, annulled or violated. Certain proprietary

knowledge may be leaked, either inadvertently or willfully, at various stages of the production process. In

the event that the confidential technical or proprietary information in respect of our products or business

becomes available to third parties or to the general public, any competitive advantage we may have over

other companies in the generics industry could be compromised. Moreover, our existing trademarks and

patents may expire, and there can be no assurance that we will renew them after expiry.

We seek to launch generic pharmaceutical products either where patent protection or other regulatory

exclusivity of equivalent branded products have expired, where patents have been declared invalid or where

products do not infringe on the patents of others. However, due to our marketing and distribution activities

in many parts of the world, we may manufacture or sell products that may infringe intellectual property

rights of others that could subject us to potentially high-value claims for infringement. The manufacture

use and sale of generic versions of products has been subject to substantial litigation in the pharmaceutical

industry which mostly relate to the validity and infringement of patents or proprietary rights of third parties.

If our products were found to be infringing on the intellectual property rights of a third-party, we could be

required to cease selling the infringing products, causing us to lose future sales revenue from such products

and face substantial liabilities for patent infringement, in the form of either payment for the innovator’s lost

profits or a royalty on our sales of the infringing product. Any litigation, regardless of the merits or eventual

outcome, would be costly and time consuming and we could incur significant costs and/or a significant

reduction in revenue in defending the action and from the resulting delays in manufacturing, marketing or

selling any of our products subject to such claims. Our insurance cover may also not extend to these claims

or sufficiently cover them.

18. The availability of counterfeit drugs, such as drugs manufactured by other companies and passed off as

our products, could adversely affect our goodwill and results of operations.

Entities in India and abroad could pass off their own products as ours, including counterfeit or pirated

products. For example, certain entities could imitate our brand name, packaging materials or attempt to

create look-alike products. As a result, our market share could be reduced due to replacement of demand

for our products and decreases in our goodwill and the market registration of our products. The proliferation

of unauthorized copies of our products, and the time and attention lost to defending claims and complaints

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about spurious products, could decrease our revenue and have an adverse effect on our goodwill, financial

condition and results of operations.

19. If we inadvertently infringe on the patents of others, our business may be adversely affected.

We operate in an industry characterized by extensive patent litigation, including both litigation by innovator

companies relating to purported infringement of innovative products and processes by generic

pharmaceuticals and litigation by competitors or innovator companies to delay the entry of a product into

a market. Patent litigation can result in significant damages being awarded and injunctions that could

prevent the manufacture and sale of certain products or require us to pay significant royalties in order to

manufacture or sell such products. While it is not possible to predict the outcome of patent litigation, we

believe any adverse result of such litigation could include an injunction preventing us from selling our

products or payment of significant damages or royalty, which would affect our ability to sell current or

future products or prohibit us from enforcing our patent and proprietary rights against others. The

occurrence of any of these risks could adversely affect our business, financial condition and results of

operations.

20. Our business subjects us to various operational risks in multiple countries that could materially

adversely affect our business, results of operations and prospects.

We have a presence and sell our products in over 65 countries including the United States, India, Europe,

Canada, Australia, Brazil and South Africa. As a result of our existing and expanding international

operations, we are subject to risks inherent to establishing and conducting operations on an international

scale, including:

• cost structures and language factors associated with managing and coordinating our international

operations;

• compliance with a wide range of regulatory requirements, foreign laws, including immigration,

labour and tax laws;

• ability to obtain the necessary approval from Indian authorities, the USFDA and other foreign

regulatory authorities, as applicable, for the products which we intend to sell;

• difficulty in managing foreign operations;

• potential difficulties with respect to protection of our intellectual property rights in some countries

which may result in infringement by others of our intellectual property rights;

• social, economic, political, geopolitical conditions and adverse weather conditions, such as natural

disasters, civil disturbance, terrorist attacks, war or other military action;

• outbreaks of diseases, such as COVID-19, resulting in a widespread health crisis; and

• fluctuation in the exchange rate.

The growth in size or scope of our business, expansion of our footprint in existing regions in which we

operate and entry into new markets also will expose us to regulatory regimes with which we have no prior

direct experience and expansion into new product areas could lead to our becoming subject to additional

or different laws and regulations. If any of these risks materialise, it could have a material adverse effect

on our business, results of operations and prospects.

21. A majority of our Indian manufacturing facilities are located in the State of Gujarat and due to such

geographical concentration, are subject to risks pertaining to disruptions in or lack of basic

infrastructure, which could increase our manufacturing costs or interrupt our operations.

A majority of our manufacturing units are located at different locations in the state of Gujarat. Accordingly,

we are exposed to risks including regulatory changes, natural or man-made disasters, political agitations,

workforce disruptions and disruptions in infrastructure facilities, such as power, water and other utilities,

45

to majority of our Indian manufacturing facilities. Such disruptions could require us to limit or cease

production at our manufacturing facilities or incur additional costs towards upgrading our units or to find

alternatives sources to manufacture our products, which we may not be able to obtain in a timely manner,

or at all. Such events may have an adverse effect on our business, financial condition or results of

operations.

22. We depend on third-party vendors for raw materials and services, any disruption, deficiency in service or

increase in cost of which could adversely affect our business and results of operations.

We depend on third-party vendors and suppliers for a number of services and raw materials including timely

supply of specified raw materials, equipment, contract manufacturing, formulation or packaging services

and maintenance services. We expect our reliance on these third-party vendors to continue to increase as

we expand our business. Although we actively manage these third party relationships to ensure continuity

of services and supplies on time and to required specifications, some events beyond our control could result

in these third parties to experience disruptions, provide lower-quality service or increase the prices of their

products or services.

Should we experience a disruption in the supply, or quality, of these services or products, or if such contracts

for services expire, we may not be able to find a replacement or renew our contracts, as the case may be, in

a timely fashion, commercially acceptable terms or at all, or if there are significant increases in the cost of

these supplies (due to factors outside of our control, such as general economic conditions, competition for

resources, production levels, transportation costs, the construction, operation and maintenance of the

transportation infrastructure in the regions in which we operate, and import duties), our business, financial

condition and results of operations may be adversely affected.

23. Stricter marketing norms prescribed by a new code of conduct in India for companies doing business in

the pharmaceuticals industry could affect our ability to effectively market our products which may affect

our profitability.

In December 2014, the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers of the

Government of India announced details of the Uniform Code of Pharmaceutical Marketing Practices

(“UCPMP”), which became effective across India from January 1, 2015. The UCPMP is a voluntary code

which, among other things, provides detailed guidelines about promotional materials, conduct of medical

representatives, physician samples, gifts and relationships with healthcare professionals. For example,

under the UCPMP, pharmaceutical companies may not supply or offer any gifts, pecuniary advantages or

benefits in kind to persons qualified to prescribe or supply drugs. Further, the managing director or the

chief executive officer of the company is responsible for ensuring adherence to the UCPMP and a self-

declaration is required to be submitted by the managing director or the chief executive officer within two

months of the closure of every financial year to the industry association. Although these guidelines are

voluntary in nature, they may be made mandatory in the future and we may be required to spend a

considerable amount of time and resources to conform to the requirements of the UCPMP.

Further, pursuant to a notification dated October 8, 2016, the Indian Medical Council (Professional

Conduct, Etiquette and Ethics) Regulations, 2002 were amended to require that doctors in India are required

to provide prescriptions to patients in terms of generic pharmaceutical names instead of particular brand or

trade names of medicines. Our business relies, in part, on doctors, including specialists and super

specialists, who prescribe our products identified by their brand names, particularly in our chosen

therapeutic areas. In the event doctors, including specialists and super specialists, are unable to or are

restricted from prescribing our brands, the demand for, and volume of sales of, our products may decrease,

which may have an adverse effect on our business, results of operations and financial condition.

24. Patent laws allowing innovator companies to extend their patents could delay the introduction of generic

products and adversely affect our business.

In many countries, patent holders have the option of extending the terms of their patents. The United States

Patent and Trademark Office allows companies to extend the terms of their patents, inter alia to make up

for the time lost while awaiting USFDA approval. The USFDA also allows for exclusivity to be extended

in specific cases. Companies are also known to make additional patents publicly known close to expiry of

a patent for a particular molecule, which effectively extends the patent life and delays competition. If a

company introduced, authorized or assisted another company to bring an authorized generic product to the

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market, then the generic market value of a product for which we intend to file a patent challenge may be

reduced. The extension of patent terms or the extension of exclusivity in the marketplace by these or other

means may delay our introduction of generic products and may adversely affect our business.

25. Consolidation of pharmaceutical industry participants may affect our ability to effectively compete with

other pharmaceutical companies in the development and sale of products and technologies, which may

adversely affect our business, results of operations and financial condition.

Our competitors, which include major multinational corporations, may consolidate, and the strength of

combined companies could affect our competitive position in all of our business areas. Consolidated

corporations may have greater financial, manufacturing, research and development, marketing and other

resources, broader product ranges and larger, stronger sales forces, which may make them more competitive

than us. Furthermore, if one of our competitors or their customers acquires any of our customers or suppliers,

we may lose business from the customer or lose a supplier of a critical raw material or component, which

may adversely affect our business, results of operations and financial condition.

26. If innovator pharmaceutical companies are successful in limiting the use of generics through their

legislative, regulatory and other efforts, introductions of our generic products may be delayed.

Many pharmaceutical companies increasingly have used state and federal legislative and regulatory means

to delay generic competition.

These efforts have included:

• pursuing new patents for existing products that may be granted just before the expiration of earlier

patents, which could extend patent protection for additional years or otherwise delay the launch of

generics;

• selling the brand product as an authorized generic, either by the brand company directly, through an

affiliate or by a marketing partner;

• attaching patent extension amendments to non-related federal legislation;

• engaging in state-by-state initiatives to enact legislation that restricts the substitution of some generic

drugs, which could have an impact on products that we are developing; and

• seeking patents on methods of manufacturing certain active pharmaceutical ingredients.

If pharmaceutical companies or other third parties are successful in limiting the use of generic products

through these or other means, introductions of our generic products may be delayed, and our business,

prospects, results of operations, and financial condition may be adversely affected.

27. If we do not successfully develop new products or continue our product portfolio expansion in a timely

and cost-effective manner through extensive R&D, our business, financial condition and results of

operations may be adversely affected.

Our future results of operations depend, to a significant degree, on our ability to successfully develop new

products and continue our product portfolio expansion in a timely and cost-effective manner. The

development and commercialization of new products are complex, time-consuming, costly and involves a

high degree of business risk. We may encounter unexpected delays in the launch of these products or these

products, if and when fully commercialized by our distributors, may not perform as we expect.

The success of our new product offerings will depend on several factors, including our ability to properly

anticipate customer needs; obtain timely regulatory approvals; establish collaborations with suppliers and

customers; develop and manufacture our products in a timely and cost-effective manner through our R&D

efforts; and successfully market and sell our products. In addition, the development and commercialization

of new products is characterized by significant upfront costs, including costs associated with R&D, product

development activities, obtaining regulatory approvals, building inventory and sales and marketing.

Furthermore, the development and commercialization of new products is subject to inherent risks, including

the possibility that any new product may:

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• fail to receive or encounter unexpected delays in obtaining necessary regulatory approvals;

• be difficult or impossible to manufacture on a large scale;

• be uneconomical to market;

• fail to be developed prior to the successful marketing of similar or superior products by third

parties; and

• infringe on the proprietary rights of third parties.

28. We require a large number of approvals and licenses in the ordinary course of business, and the failure

to obtain or retain them in a timely manner may adversely affect our business and financial condition

and results of operations.

We are required to obtain and maintain a number of statutory and regulatory licenses, permits and approvals

for carrying out our business and for each of our manufacturing facilities under various central, state and

local governmental rules and regulations in India and abroad. A majority of these approvals are granted for

a limited duration and require renewal. While we have applied for some of these approvals, we cannot

assure you that such approvals will be issued or granted to us in a timely manner, or at all. If we do not

receive such approvals or are not able to renew the approvals in a timely manner, our business and

operations may be materially adversely affected. For instance, with respect to our domestic formulations

facility in Sikkim, we have made a renewal application to the State Pollution Control Board, Sikkim

(“SPCB”) to obtain consent to operate our facility as well as to handle hazardous wastes, which is pending

grant of renewal on account of COVID-19.

Further, the licenses, permits and approvals required by us are subject to several conditions and we cannot

assure you that we will be able to continuously meet such conditions, which may lead to cancellation,

revocation or suspension of the relevant licenses, permits and approvals. If there is any failure by us to

comply with the applicable regulations or if the regulations governing our business are amended, we may

incur increased compliance costs, be subject to penalties, have our licenses, approvals and permits revoked

or suffer a disruption in our operations, any of which may materially adversely affect our business and

results of operations.

29. Our Company is involved in certain legal proceedings. Any adverse decision in such proceedings may

have an adverse effect on our business, financial condition and results of operations.

We are involved in certain legal proceedings which are pending at different levels of adjudication before

various courts, tribunals and other authorities. We can give no assurance that these legal proceedings will

be decided in our favour. Such proceedings could divert our management’s time and attention and consume

financial resources. Any adverse order or direction in these cases by the concerned authorities even though

not quantifiable, could have an adverse impact on our business and reputation. Any fine or imprisonment

may adversely affect our business, prospects, results of operations and reputation. For further details, please

see “Legal Proceedings” on page 174.

30. We may be required to conduct clinical trials for some of our products in the future. Clinical drug

development involves a lengthy and expensive process with uncertain outcomes, and we may be unable

to achieve successful results in our clinical trials.

Before obtaining regulatory approvals for the sale of some of our drug candidates in the future, we may be

required to conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates

in humans. Clinical trials are expensive, difficult to design and implement, can take many years to complete

and are uncertain as to the outcomes. A failure of one or more of our clinical trials can occur at any stage

of testing.

We may also experience numerous adverse events during clinical trials that could delay or prevent our

ability to successfully complete clinical trials, including:

• regulators may not authorise us or our investigators to commence a clinical trial or conduct a clinical

trial at a prospective trial site;

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• clinical trials of our drug candidates may produce negative or inconclusive results, and we may

decide, or regulators may require us, to conduct additional clinical trials or abandon the relevant

drug development programmes;

• patient enrolment may be insufficient or slower than we anticipate or patients may drop out at a

higher rate than we anticipate;

• we might have to suspend or terminate clinical trials of our drug candidates for various reasons,

including a finding of a lack of clinical response or a finding that participants are being exposed to

unacceptable health risks;

• regulators or ethics committees may require that we or our investigators suspend or terminate clinical

trials for various reasons, including non-compliance with regulatory requirements;

• the cost of clinical trials of our drug candidates may be greater than we anticipate and we may not

be able to obtain sufficient funding to complete our clinical trials;

• the supply or quality of our drug candidates or other materials necessary to conduct clinical trials of

our drug candidates may be insufficient or inadequate; and

• our drug candidates may cause adverse events, have undesirable side effects or other unexpected

characteristics, which cause us or our investigators to suspend or terminate the trials and may have

an adverse financial impact on us.

31. We rely extensively on our operational support systems, including products processing systems and

information technology systems, the failure of which could adversely affect our business, financial

condition and results of operations.

We depend extensively on the capacity and reliability of the quality assurance, quality control, product

development and information technology systems supporting our operations. Our systems are subject to

damage or incapacitation by natural disasters, human error, power loss, sabotage, computer viruses,

hacking, acts of terrorism and similar events or the loss of support services from third parties. Any failure

or disruption in the operation of these systems or the loss of data due to such failure or disruption may

affect our ability to plan, track, record and analyze work in progress and sales, process financial

information, manage product lifecycle, payables and inventory or otherwise conduct our normal business

operations, which may increase our costs and materially adversely affect our business and results of

operations. There can be no assurance that we will not encounter disruptions in the future. Any disruption

in the use of, or damage to, our systems may adversely affect our business, financial condition and results

of operations.

32. Our contracts are governed by the laws of various countries and disputes arising from such contracts

may be subject to the exclusive jurisdiction of courts situated in such countries.

Most of the contracts executed with our distributors and customers are governed by the laws of the country

in which the distributor or customer is incorporated. Further, any disputes related to such contracts may be

subject to the exclusive jurisdiction of courts situated in such countries. Any lawsuits with respect to such

disputes must be instituted in a court having jurisdiction over the contract, which may cause difficulty for

our Company to manage such suits and to obtain enforcement of awards and may also lead to greater costs

for managing such litigation.

33. Reforms in the healthcare industry and the uncertainty associated with pharmaceutical pricing,

reimbursement and related matters could adversely affect the marketing, pricing and demand for our

products.

Our success will depend in part on the extent to which government and health administration authorities,

private health insurers and other third-party payers will pay for our products. Increasing expenditures for

healthcare has been the subject of considerable public attention in almost every jurisdiction where we

conduct business. Both private and governmental entities are seeking ways to reduce or contain healthcare

costs by limiting both coverage and the level of reimbursement for new therapeutic products. In many

49

countries in which we currently operate, including India, pharmaceutical prices are subject to regulation.

Price controls operate differently in different countries and can cause wide variations in prices between

markets. Currency fluctuations can aggravate these differences. The existence of price controls can limit

the revenues we earn from our products. For example, in India, prices of certain pharmaceutical products

are determined by the Drug (Prices Control) Order, 2013 (“DPCO”), promulgated by the Indian

government and administered by the National Pharmaceutical Pricing Authority (“NPPA”). If the prices

of more of our products are administered or determined by NPPA or other similar authorities outside India,

it would impact our ability to determine pricing for our products, which in turn may have an adverse impact

on our profitability.

34. We are dependent upon the experience and skill of our management team and key employees. If we are

unable to attract and retain qualified personnel, our results of operations may be adversely affected.

Our business and operations are led by a highly qualified, experienced and capable management team. We

are also supported by qualified personnel possessing a range of qualifications in the field of science at

postgraduate and graduate levels, the loss of whose services may significantly delay or prevent the

achievement of our business objectives. Competition among pharmaceutical companies for qualified

employees, particularly R&D personnel, is intense and the ability to retain and attract qualified individuals

is critical to our success.

Our success significantly depends upon the continued service of our management and key personnel. If we

lose the services of any of the management team or key personnel, we may be unable to locate suitable or

qualified replacements, and may incur additional expenses to recruit and train new personnel, which could

adversely affect our business operations and ability to continue to manage and expand our business.

Furthermore, as we expect to continue to expand our operations and develop new products, we will need

to continue to attract and retain experienced management, R&D and sales personnel.

Moreover, we do not maintain key person insurance to insure against the loss of key personnel. There can

be no assurance that we will be able to retain and attract such individuals in the future on acceptable terms,

or at all, and the failure to do so may have an adverse effect on our business, prospects, results of operations

and financial condition.

35. We may not be able to correctly assess the demand for our products, which may adversely affect our

business, financial condition and results of operations.

Our production and distribution processes require us to anticipate the demand for our products based on

the feedback received from our own marketing personnel, distributors and partners. Accurate assessment

of market demand requires significant investment in our sales and marketing network and training of

marketing personnel. There is no guarantee that our estimate of market demand in India or foreign countries

in which we sell our products will be accurate. In the event that we overestimate the demand for our

products, we may have expended resources in manufacturing excess products and paid taxes, export costs,

insurance costs, distribution expenses, storage and warehousing and other related expenditures. Our

products have a limited expiry period and in the event of excess production, we might have to bear the cost

of expiry and destruction of these goods. In the event that we underestimate the market demand, or fail to

order a sufficient volume of supplies and input materials from our third-party suppliers, we may be unable

to meet customer orders and lose out on sales opportunities that our competitors may capitalise on. Failure

to meet customer orders may also occur because existing manufacturing facilities and other equipment do

not have sufficient capacity or we have an inaccurate level of inventory holding. Accordingly, any incorrect

assessment of the demand for our products may adversely affect our business, financial condition and

results of operations.

36. If we fail to keep pace with evolving technological standards in the pharmaceutical industry, create new

products or intellectual property, or respond to changes in market demand or customer requirements,

our business and financial results could be adversely affected.

The pharmaceutical industry is characterized by rapid advancements in technology fueled by high expenses

incurred on R&D. These advancements result in the frequent introduction of new products and significant

price competition. To meet our customers’ needs as well as keep pace with our competitors, we regularly

update existing technology and develop new technology for our pharmaceutical manufacturing activities.

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However, rapid and frequent advancements in technology and market demand changes can often render

existing technologies and equipment obsolete, requiring substantial new capital expenditures and/or write-

downs of assets. The cost of implementing new technologies and upgrading our manufacturing facilities as

well as R&D could be significant and higher than initially anticipated and could adversely affect our

business, prospects, results of operations and financial condition. In addition, when we develop a new

product or an advanced version of an existing product, we may encounter obstacles that may delay

development and consequently increase our expenses, and we typically incur significant costs and effort

upfront to market, promote and sell the new product offering.

The commercial success of the products and technologies we develop will depend upon the acceptance of

these products by customers and competition in the market. It is difficult for us to predict whether recently

introduced products, or the products that we are currently developing, will be commercially successful. If

our new products or enhancements do not achieve adequate acceptance in the market, this may ultimately

force us to abandon a potential product in which we have already invested substantial time and resources,

and our competitive position will be impaired, our revenue will be diminished and the effect on our

operating results may be particularly acute because of the significant research, development, marketing,

sales and other expenses we will have incurred in connection with the new product or enhancement.

In addition, our competitors may have filed patent applications or hold patents relating to products or

processes which compete with those we are developing. There is no guarantee that our pending applications

will result in any patent being granted, or that the patents we have been granted will result in the

commercialization of products.

37. A relatively small group of products may generate a significant portion of our net revenues from

operations from time to time and our prospects, business, financial condition and results of operations

may be materially and adversely affected if products in these products do not perform as well as expected

or if competing products become available or gain wider market acceptance.

From time to time, sales of a limited number of products may represent a significant portion of our revenues

from operations. At any time, our net revenues from operations from these such products may decline as a

result of increased competition, regulatory action, pricing pressures or fluctuations in the demand for or

supply of such products. Similarly, in the event of any breakthroughs in the development of alternatives,

our products may become obsolete or be substituted by such alternatives. Further in relation to the United

States our revenues may decline as a result increase in competition and price erosion resulting from changes

to the regulatory regime for product approvals and ANDA filings. Any such material adverse developments

with respect to the sale or use of any of our products, or failure to successfully introduce new products,

could adversely affect our business, financial condition and results of operations.

38. If we improperly handle any of the hazardous materials used in our business and accidents result, we

could face significant liabilities that would lower our profits.

In our research and development and manufacturing activities, we handle and use certain hazardous

materials, chemicals, biologics, viruses and other explosive, toxic and combustible materials. If improperly

handled or subjected to the wrong conditions, these materials could hurt our employees and other persons,

cause damage to our properties and harm the environment (including with respect to residential areas

located in close proximity to our manufacturing facilities). For example, laws in India limit the amount of

hazardous and pollutant discharge that our manufacturing facilities may release into the air and water. The

discharge of raw materials that are chemical in nature or of other hazardous substances into the air, soil or

water beyond these limits may cause us to be liable to regulatory bodies or third parties. In addition, we

may be required to incur costs to remedy the damage caused by such discharges, pay fines or other penalties

for non-compliance. Also, increase in business and operations in our plants, and the consequent hiring of

new employees, can pose increased safety hazards. Such hazards need to be addressed through training,

industrial hygiene assessments and other safety measures and, if not carried out, can lead to industrial

accidents. Any of the foregoing could subject us to significant litigation or adversely impact our other

litigation matters then outstanding, which could lower our profits in the event we were found liable, and

could also adversely impact our reputation. In a worst case scenario, this could also result in a government

forced shutdown of our manufacturing plants, which in turn could lead to product shortages that delay or

prevent us from fulfilling our obligations to customers and would harm our business and financial results.

39. The proceeds raised in this Issue are subject to the discretion of our management as well as to market

51

and credit risks, pending utilization.

Although we intend to use the net proceeds received from the Issue in accordance with the “Use of Proceeds”

section on page 66, such use is subject to the discretion of our management. Pending utilization for the

purposes described in the “Use of Proceeds” section in this Placement Document, we intend to temporarily

invest funds in instruments that we deem to be creditworthy, including money market mutual funds and

deposits with banks. Factors such as interest rates, exchange rates and the creditworthiness of the

counterparties, among others, may have an adverse effect on these investments which may result in our

inability to use the proceeds raised in this Issue in the manner indicated.

40. Any future issuance of Equity Shares may dilute prospective investors' shareholding and sales of our

Equity Shares by our Promoters or other major shareholders may adversely affect the trading price of

the Equity Shares.

Any future issuance of Equity Shares by us, such as a primary offering or pursuant to a preferential

allotment, may dilute your shareholding in us, adversely affect the trading price of our Equity Shares and

could affect our ability to raise capital through an issuance of our securities. In addition, any perception by

investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.

Additionally, the disposal of Equity Shares by any of our significant shareholders or our Promoters, any

future issuance of Equity Shares by any of our significant shareholders or Promoters, any future issuance

of Equity Shares by us or the perception that such issuances or sales may occur may significantly affect the

trading price of the Equity Shares. We cannot assure you that we will not issue Equity Shares or that such

shareholders will not dispose of, pledge or encumber their Equity Shares in the future.

41. We could be adversely affected by violations of anti-bribery laws worldwide.

The pharmaceutical industry is highly regulated and pharmaceutical companies are subject to various anti-

bribery regulations worldwide, and even minor irregularities can potentially give rise to significant

consequences. Anti-bribery laws worldwide, especially U.S. Foreign Corrupt Practices Act (the “FCPA”)

generally prohibit companies and their intermediaries from making improper payments to government

officials for the purpose of obtaining or retaining business. Pharmaceutical companies are particularly at

risk of anti-bribery law violations because health care systems in some countries are often owned or

operated by government agencies. Therefore, during the course of business activities, interactions with

individuals considered to be government officials can be more frequent than in other industries. As a result,

there is heightened exposure to potential corruption risk, and over the past few years, a number of

pharmaceutical and other healthcare companies have been prosecuted under anti-bribery laws for a variety

of activities, such as providing free trips, free goods, grants and other monetary benefits to doctors and

hospitals. Our policies mandate compliance with these laws, which often carry substantial penalties.

However, our internal control policies and procedures may not always protect us from acts committed by

our affiliates, employees or agents which may violate these laws and regulations. Violations of anti-bribery

laws and regulations could result in fines and penalties, criminal sanctions against us, our officers or our

employees, prohibitions on the conduct of our business and on our ability to offer our products in one or

more countries, and could also materially affect our brand, our international growth efforts, our ability to

attract and retain employees, our business, and our operating results. There can be no assurance that our

partners, our employees, contractors, or agents will not subject us to potential claims or penalties. Any

violations of these laws, or allegations of such violations, could have a material adverse effect on our

business, financial position, and results of operations.

42. We appoint contract labour for carrying out certain of our operations and we may be responsible for

paying the wages of such workers if the independent contractors through whom such workers are hired

default on their obligations, and such obligations could have an adverse effect on our results of

operations and financial condition.

In addition to our employees, in order to retain flexibility and control costs, we appoint independent

contractors who in turn engage on-site contract labour for performance of certain of our operations.

Although we do not engage these labourers directly, we may be held responsible for any wage payments

including social security contributions to be made to such labourers in the event of default by such

independent contractors. Any requirement to fund their wage requirements may have an adverse impact on

our results of operations and financial condition. Thus, any such order from a regulatory body or court may

52

have an adverse effect on our business and results of operations.

43. A certain portion of our business operations are being conducted on leased or licensed premises. Our

inability to seek renewal or extension of such leases and/or leave & licenses may adversely affect our

business operations.

A certain portion of our business operations are being conducted on premises leased from third parties or

availed on a lease and license basis from third parties. While there are currently no instances of non-

compliance of the terms of our lease agreements, there can be no assurance that there will be no such non-

compliance leading to termination of such leases in the future. Any change in the terms and conditions of

the lease agreements and any premature termination of such lease agreements may have an adverse impact

on our business operations.

Any adverse impact on the title and ownership rights of the owners from whose premises we operate, breach

of the contractual terms of any lease deeds, or any inability to renew such agreements on acceptable terms

may also affect our business operations. In addition, the terms of certain of our leases require us to obtain

the lessor’s prior consent for certain actions, including making structural alterations to the leased premises,

which may be required if we were to undertake an expansion in the future.

There can be no assurance that we will be able to renew these leasing arrangements at commercially

favourable terms, or at all. If we are unable to renew all or any of our leasing arrangements, it may cause

disruptions in our business and we may incur substantial costs associated with shifting to new premises, all

of which may adversely affect our business operations.

44. Our insurance coverage may not adequately protect us against all losses. To the extent that we suffer

loss or damage which is not covered by insurance or exceeds our insurance coverage, our results of

operations and financial performance could be adversely affected.

We maintain insurance policies for our manufacturing facilities in India, including buildings, machinery

and inventories, consequential damages such as loss of profit, coverage for risks during the shipment of

products, public liability coverage, product liability coverage such as in cases of product recalls. In addition,

we also maintain insurance policies covering directors’ and officers’ liability, personal accidents,

environmental damages, terrorist acts and war related events. For further details, please see “Our Business

– Insurance” on page 115.

While we believe that the insurance coverage which we maintain would be reasonably adequate to cover

the normal risks associated with the operation of our business, we cannot assure you that any claim under

the insurance policies maintained by us will be honored fully, in part or on time, or that we have taken out

sufficient insurance to cover all our losses. Our insurance policies may not provide adequate coverage in

certain circumstances and are subject to certain deductibles, exclusions and limits on coverage. In addition,

our insurance coverage expires from time to time. We apply for the renewal of our insurance coverage in

the normal course of our business, but we cannot assure you that such renewals will be granted in a timely

manner, at acceptable cost or at all. To the extent that we suffer loss or damage for which we did not obtain

or maintain insurance, and which is not covered by insurance or exceeds our insurance coverage or where

our insurance claims are rejected, the loss would have to be borne by us and our results of operations, cash

flows and financial condition may be adversely affected.

45. Changes in trade policies may affect us.

Given the scale of our international operations, any change in policies by the countries in which we operate,

in terms of tariff and non-tariff barriers, from which our suppliers import or export their raw materials or

components, or countries to which we export our products, may have an adverse effect on our profitability.

Furthermore, we import various raw materials (including APIs) that are not produced in-house by us.

There is currently significant uncertainty about the future relationship between the United States and

various other countries, most significantly China, with respect to trade policies, treaties, government

regulations and tariffs. The current government of the United States has called for substantial changes to

their foreign trade policy with respect to China and other countries, including the possibility of imposing

greater restrictions on international trade and significant increases in tariffs on goods imported into the

United States, this may also have an impact on Asian markets. Such imposition of tariffs, trade restrictions

53

and trade barriers could have a generally disruptive impact on the global economy and, therefore, negatively

impact our sales. Given the relatively fluid regulatory environment in China and the United States and

uncertainty regarding how the United States or other foreign governments will act with respect to tariffs,

international trade agreements and policies, a trade war, further governmental action related to tariffs or

international trade policies, or additional tax or other regulatory changes in the future could occur and could

directly and adversely impact our financial results, cash flows and results of operations.

46. The United Kingdom’s vote to leave the European Union may possibly have uncertain effects and could

adversely affect us.

On June 23, 2016, the electorate in the U.K. voted in favour of leaving the European Union ("EU")

(“Brexit”). Thereafter, on March 29, 2017, the country formally notified the EU of its intention to withdraw

pursuant to Article 50 of the Lisbon Treaty. The withdrawal of the U.K. from the EU took effect on January

31, 2020. The effects of Brexit will depend on agreements the U.K. makes to retain access to EU markets

subsequently. Brexit creates an uncertain political and economic environment in the U.K. and potentially

across other EU member states for the foreseeable future and such uncertainties could impair or limit our

ability to transact business in the member EU states.

Further, Brexit could adversely affect European and worldwide economic or market conditions and could

contribute to instability in global financial markets, and the value of the British pound sterling currency or

other currencies, including the euros. We are exposed to the economic, market and fiscal conditions in the

U.K. and the EU and to changes in any of these conditions. Depending on the terms reached regarding

future access to EU markets, it is possible that there may be adverse practical and/or operational

implications on our business.

A significant amount of the regulatory regime that applies to us in the U.K. is derived from EU directives

and regulations. However, Brexit could change the legal and regulatory framework within the U.K. where

we operate and is likely to lead to legal uncertainty and potentially divergent national laws and regulations

as the U.K. determines which EU laws to replace or replicate. Consequently, no assurance can be given as

to the impact of Brexit and, in particular, no assurance can be given that our operating results, financial

condition and prospects would not be adversely impacted by the result.

47. If third parties on whom we rely for clinical trials do not perform their obligations as contractually

required or as we expect, and do not comply with cGMP, we may not be able to obtain regulatory

approval for or commercialize our products.

We depend on independent clinical investigators, contract research organizations and other third-party

service providers to conduct clinical trials and pre-clinical investigations of our new products and expect

to continue to do so. We also collaborate with other parties having technical and/ or business capabilities

to conduct early stage testing of products we intend to develop. We rely on such parties for successful

execution of our clinical trials, but we do not control many aspects of their activities. Third parties may

also not complete activities on schedule or may not conduct our studies in accordance with applicable trial,

plans and protocols. Nonetheless, we are responsible for confirming that each of our clinical trials is

conducted in accordance with its general investigational plan and protocol. If third parties fail to carry out

their obligations, product development, approval and commercialization could be delayed or prevented or

an enforcement action could be brought against us.

Our reliance on these third parties does not relieve us of our responsibility to comply with the regulations

and standards of the USFDA and other regulatory authorities related to good clinical practices. In particular,

these third-party manufacturers and service providers must comply with cGMP and their failure to do so

could result in warning or deficiency letters from regulatory authorities, which could interfere with or

disrupt their ability to complete our studies on time, thereby affecting our product approval process or even

forcing a withdrawal of our product which may adversely affect our business, financial condition and

results of operations.

48. The acquisition of other companies, businesses or technologies could result in operating difficulties,

dilution and other adverse consequences.

As part of our existing growth strategy, we may from time to time pursue strategic acquisitions of

companies, products and technologies or enter into partnerships to strengthen our product and technology

54

infrastructure. We cannot assure you that we will be able to identify suitable acquisition, strategic

investment or joint venture opportunities at acceptable cost and on commercially reasonable terms, obtain

the financing necessary to complete and support such acquisitions or investments, integrate such businesses

or investments or that any business acquired or investment made will be profitable. If we attempt to acquire

companies outside of India, we may not be able to satisfy certain regulatory requirements for such

acquisitions.

In addition, acquisitions and investments involve a number of risks, including possible adverse effects on

our operating results, exposure to future funding obligations, diversion of management’s attention, failure

to retain key personnel, currency risks, risks associated with unanticipated events or liabilities, possible

contravention of applicable laws in relation to investment and transfer of shareholding, including any pre-

emptive rights of existing shareholders of such entities and difficulties in the assimilation of the operations,

technologies, systems, services and products of the acquired businesses or investments, as well as other

economic, political and regulatory risks. Failure to achieve successful integration of any future acquisitions

or investments could have a material adverse effect on our business, financial condition and results of

operations. Future acquisitions could result in potentially dilutive issuances of our equity securities, the

incurrence of debt, contingent liabilities or amortization expenses, or write-offs of goodwill, any of which

could harm our financial condition and may have an adverse impact on the price of our Equity Shares.

Accordingly, integrating acquired business in a timely or efficient manner may not be possible for our

Company, and which could in turn adversely affect our opportunities to yield the benefits of acquisition.

49. We have relied on various industry sources, including publicly available data, for reproducing industry

related data in this Placement Document and such data has not been independently verified by us.

We have relied on various publicly and privately available sources, including from the websites of USFDA,

Pharmexcil, the IQVIA Research Reports and others (together, the “Industry Reports”) for industry

related data that has been disclosed in this Placement Document. The Industry Reports use certain

methodologies for market sizing and forecasting. We have not independently verified such data and

therefore, while we believe them to be true, we cannot assure you that they are complete or reliable.

Accordingly, investors should read the industry related disclosure in this Placement Document in this

context. Industry sources and publications are also prepared based on information as of specific dates and

may no longer be current or reflect current trends. Industry sources and publications may also base their

information on estimates, projections, forecasts and assumptions that may prove to be incorrect. While

industry sources take due care and caution while preparing their reports, they do not guarantee the accuracy,

adequacy or completeness of the data. Accordingly, investors should not place undue reliance on, or base

their investment decision solely on this information. For further details, please see “Industry Overview” on

page 93.

50. We have contingent liabilities and our financial condition could be adversely affected if any of these

contingent liabilities materializes.

As of March 31, 2020, our financial statements disclosed the following contingent liabilities as per Ind AS

37 – Provisions, Contingent Liabilities and Contingent Assets, as derived from the Audited Consolidated

Financial Statements are as follows: (in ₹ crores)

Particulars As of March

31, 2020

Letters of credit and guarantees 113.40

Liabilities Disputed in appeals 3.67

Claims against the Company not acknowledged as debt 0.35

Export obligation against advance license 0.03

Disputed liability in respect of Ministry of Industry, Department of Chemicals and

Petrochemicals in respect of price of Rifampicin allowed in formulations and landed cost

of import

0.35

51. Our Directors and key management personnel may have interests other than reimbursement of expenses

incurred and normal remuneration or benefits in our Company.

Our Directors and key management personnel may be interested in our Company to the extent of the Equity

55

Shares held by them in our Company, and any dividends, bonuses or other distributions on such Equity

Shares. For further details, see “Board of Directors and Senior Management” on page 118.

52. We have entered into transactions with related parties. We will continue to enter into such transactions

and there can be no assurance that we could not have achieved more favourable terms had such

transactions not been entered into with related parties.

We have entered into transactions with several related parties, including our Promoters, Directors and Key

Managerial Personnel which were carried out in compliance with applicable laws. For further details, see

“Related Party Transactions” on page 71.

While we believe that all such transactions have been conducted on an arms-length basis, there can be no

assurance that we could not have achieved more favourable terms had such transactions not been entered

into with related parties. Furthermore, it is likely that we will continue to enter into related party

transactions in the future. There can be no assurance that these or any future related party transactions that

we may enter into, individually or in the aggregate, will not have an adverse effect on our business and

results of operations. Further, the transactions with our related parties may potentially involve conflicts of

interest. There can also be no assurance that any dispute that may arise between us and related parties will

be resolved in our favour.

53. Our Promoters will be able to exercise significant influence and control over our Company after the

Issue and may have interests that are different from those of our other shareholders.

As of June 30, 2020 our Promoters and Promoter Group hold 72.97% of the issued and outstanding Equity

Shares of our Company. By virtue of their shareholding, our Promoters and Promoter Group will have the

ability to exercise significant control and influence over our Company and our affairs and business,

including the appointment of Directors, the timing and payment of dividends, the adoption of and

amendments to our Memorandum and Articles of Association, the approval of a merger, amalgamation or

sale of substantially all of our assets and the approval of most other actions requiring the approval of our

shareholders. The interests of our Promoters and Promoter Group may be different from or conflict with

the interests of our other shareholders and their influence may result in change of management or control

of our Company, even if such a transaction may not be beneficial to our other shareholders.

54. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash

flows, working capital requirements, capital expenditures and restrictive covenants in our financing

arrangements.

While we have paid dividends in the past, we cannot assure you that dividends will be paid in the future

and, if so, the level of such future dividends. The declaration, payment and amount of any future dividends

is subject to the discretion of our Board, and will depend on a number of factors including, our earnings,

availability of profits, capital requirements and overall financial condition, as well as the provisions of

relevant laws in India from time to time.

55. Some of our lenders have imposed certain restrictive conditions on us under our financing arrangements.

This may limit our ability to pursue our business and limit our flexibility in planning for, or reacting to,

changes in our business or industry. Further, we will require a significant amount of cash to meet our

obligations under such financing arrangements, which we may not be able to generate.

Certain of our financing agreements include conditions and restrictive covenants, including the requirement

that we obtain consent or intimation from our respective lenders prior to carrying out certain activities and

entering into certain transactions. Specifically, in some of our financing agreements, prior consent from the

respective lender is required for inter alia the amendment of our memorandum and articles of association

and changing our capital structure. While for purposes of this Issue, we have obtained all the applicable

consents from our various lenders in terms of the relevant facility documentation, these restrictions may

limit our flexibility in responding to business opportunities, competitive developments and adverse

economic or industry conditions. A breach of any of these covenants or a failure to pay interest or

indebtedness when due under any of our financing arrangements, could result in a variety of adverse

consequences, including the termination of one or more of our credit facilities, levy of penal interest, the

enforcement of any security provided, acceleration of all amounts due under such facilities and cross-

defaults under certain of our other financing agreements, any of which may adversely affect our business,

56

financial condition and results of operations. We cannot assure you that we will continue to comply with

all conditions and restrictive covenants under our financing agreements in the future.

If the obligations under any of our financing agreements are accelerated, we may have to dedicate a

substantial portion of our cash flow from operations to make payments under such financing documents,

thereby reducing the availability of cash for our working capital requirements and other general corporate

purposes. Further, during any period in which we are in default, we may be unable to obtain further

financing or any refinancing of our debt could be at higher rates with more onerous covenants, which could

further restrict our business operations. Additionally, third parties may also have concerns over our

financial position and it may be difficult to market our financial products. Any of these circumstances or

other consequences could adversely affect our business, credit rating, prospects, financial condition and

results of operations. Moreover, any such action initiated by our lenders could adversely affect the price of

the Equity Shares.

EXTERNAL RISK FACTORS

1. Our revenue is derived from business in India and a slowdown in economic growth in India could cause

our business to suffer.

We derive revenue from our operations in India, accordingly, our performance and the growth of our

business are necessarily dependent on the health of the overall Indian economy. A slowdown in the Indian

economy could adversely affect the policy of the Government of India towards the industry in which we

operate, which may in turn adversely affect our financial performance and our ability to implement our

business strategy.

The Indian economy’s growth momentum moderated significantly in Fiscal 2018 and 2019 as compared to

previous years. According to the Indian Central Statistics Organization, India’s real GDP growth decreased

from 7.0% in Fiscal 2018 to 6.1% in Fiscal 2019. According to the Indian Central Statistics Organization,

industrial sector growth slowed to 7.6% in Fiscal 2019. As per various sources, the Indian economy has

slowed further in Fiscal 2020. In particular, a number of governments and organizations have revised GDP

growth forecasts for 2020 downwards in response to the economic slowdown caused by the spread of

COVID-19, and it is possible that the COVID-19 pandemic will cause a prolonged global economic crisis

or recession. The Indian economy is also influenced by economic and market conditions in other countries,

particularly emerging market conditions in Asia. A loss of investor confidence in other emerging market

economies or any worldwide financial instability may adversely affect the Indian economy, which could

materially and adversely affect our business and results of operations and the market price of the Equity

Shares.

Further, other factors which may adversely affect the Indian economy are scarcity of credit or other

financing in India, resulting in an adverse impact on economic conditions in India and scarcity of financing

of our developments and expansions; volatility in, and actual or perceived trends in trading activity on,

India’s principal stock exchanges; changes in India’s tax, trade, fiscal or monetary policies, like political

instability, terrorism or military conflict in India or in countries in the region or globally, including in

India’s various neighbouring countries; occurrence of natural or man-made disasters; infectious disease

outbreaks or other serious public health concerns; prevailing regional or global economic conditions,

including in India’s principal export markets; and other significant regulatory or economic developments

in or affecting India.

2. Changing regulations in India, including in relation to finance and taxation laws, could lead to new

compliance requirements that are uncertain.

The regulatory environment in which we operate is evolving and is subject to change. The Government of

India may implement new laws or other regulations that could affect our businesses, which could lead to

new compliance requirements. New compliance requirements could increase our costs or otherwise

adversely affect our business, financial condition and results of operations. Further, the manner in which

new requirements will be enforced or interpreted can lead to uncertainty in our operations and could

adversely affect our operations.

For example, as of July 1, 2017, a national goods and service tax (“GST”) in India replaced taxes levied

by central and state governments with a unified tax regime in respect of the supply of goods and services

57

for all of India. However, given the recent introduction of GST in India, the practice regarding the

implementation of, and compliance with, GST is still evolving. Our business and financial performance

could be adversely affected by any unexpected or onerous requirements or regulations resulting from the

introduction of GST or any changes in laws or interpretation of existing laws, or the promulgation of new

laws, rules and regulations relating to GST, as it is implemented. Any changes to the GST rate or rules and

regulations surrounding GST and the related uncertainties with respect to the implementation of GST may

have a material adverse effect on our business, financial condition and results of operations.

Further, as GST is implemented, there can be no assurance that we will not be required to comply with

additional procedures or obtain additional approvals and licenses from the government and other regulatory

bodies or that they will not impose onerous requirements and conditions on our operations. Any such failure

to achieve compliance may result in increased cost on account of non-compliance with the GST and may

adversely affect our business and results of operations.

The Finance Act, 2020 has, amongst others things, provided a number of amendments to the direct and

indirect tax regime, including, without limitation, a simplified alternate direct tax regime and that dividend

distribution tax will not be payable in respect of dividends declared, distributed or paid by a domestic

company after March 31, 2020, and accordingly, such dividends would not be exempt in the hands of the

shareholders, both resident as well as non-resident.

3. Natural calamities, terrorist attacks, civil disturbances, outbreaks of contagious diseases, power outages

and other disruptions could have a negative impact on the Indian economy and could cause our business

to suffer and the trading price of the Equity Shares to decrease.

India has experienced natural calamities such as earthquakes, floods and drought in the recent past. The

extent and severity of these natural disasters determine their impact on the Indian economy. For example,

in May 2020, the eastern states of India, including Odisha and West Bengal received significant rainfall

due to cyclone Amphan and further the locust plague in India and South Asian countries, may have a long-

term impact in the agricultural economy of India, predominantly in Fiscal 2021 and the near future. An

erratic monsoon season could also adversely affect sowing operations for certain crops and result in a

decline in the growth rate of the agricultural sector. Further, prolonged spells of below normal rainfall in

the country or other natural calamities could have a negative impact on the Indian economy, adversely

affecting our business and potentially causing the trading price of the Equity Shares to decrease. India has

from time to time experienced instances of social, religious and civil unrest and hostilities between

neighbouring countries. Military activity or terrorist attacks in the future could influence the Indian

economy by disrupting communications and making travel more difficult and such political tensions could

create a greater perception that investments in Indian companies involve higher degrees of risk. Events of

this nature in the future, as well as social and civil unrest within other countries in Asia, could influence

the Indian economy and could have a material adverse effect on the market for securities of Indian

companies, including the Equity Shares. A number of countries in Asia, including India, as well as countries

in other parts of the world, are susceptible to contagious diseases and, for example, have had confirmed

cases of diseases such as the highly pathogenic H7N9, H5N1 and H1N1 strains of influenza in birds and

swine and more recently, the COVID-19 virus. Certain countries in Southeast Asia have reported cases of

bird-to-human transmission of avian and swine influenza, resulting in numerous human deaths. As a result,

any present or future outbreak of avian or swine influenza or other contagious disease could have a material

adverse effect on our business and the trading price of the Equity Shares.

4. We may be affected by competition law in India and abroad and any adverse application or interpretation

of the Competition Act could adversely affect our business.

The Competition Act regulates practices having an appreciable adverse effect on competition in the relevant

market in India. Under the Competition Act, any formal or informal arrangement, understanding or action

in concert, which causes or is likely to cause an appreciable adverse effect on competition is considered

void and results in the imposition of substantial monetary penalties. Further, any agreement among

competitors which directly or indirectly involves the determination of purchase or sale prices, limits or

controls production, supply, markets, technical development, investment or provision of services, shares

the market or source of production or provision of services by way of allocation of geographical area, type

of goods or services or number of customers in the relevant market or directly or indirectly results in bid-

rigging or collusive bidding is presumed to have an appreciable adverse effect on competition. The

Competition Act also prohibits abuse of a dominant position by any enterprise. On March 4, 2011, the

58

Government issued and brought into force the combination regulation (merger control) provisions under

the Competition Act with effect from June 1, 2011. These provisions require acquisitions of shares, voting

rights, assets or control or mergers or amalgamations that cross the prescribed asset and turnover based

thresholds to be mandatorily notified to and pre-approved by the CCI. Additionally, on May 11, 2011, the

CCI issued Competition Commission of India (Procedure in regard to the transaction of business relating

to combinations) Regulations, 2011, as amended, which sets out the mechanism for implementation of the

merger control regime in India. The Competition Act aims to, among others, prohibit all agreements and

transactions which may have an appreciable adverse effect on competition in India. Consequently, all

agreements entered into by us could be within the purview of the Competition Act. Further, the CCI has

extra-territorial powers and can investigate any agreements, abusive conduct or combination occurring

outside India if such agreement, conduct or combination has an appreciable adverse effect on competition

in India. However, we cannot predict the impact of the provisions of the Competition Act on the agreements

entered into by us at this stage. We are not currently party to any outstanding proceedings, nor have we

received notice in relation to non-compliance with the Competition Act or the agreements entered into by

us. However, if we are affected, directly or indirectly, by the application or interpretation of any provision

of the Competition Act, or any enforcement proceedings initiated by the CCI, or any adverse publicity that

may be generated due to scrutiny or prosecution by the CCI or if any prohibition or substantial penalties

are levied under the Competition Act, it would adversely affect our business, results of operations and

prospects. Further, our business prospects and results of operations in overseas jurisdictions may also be

adversely affected by virtue of any unfavourable changes to the existing competition law regime.

5. It may not be possible for investors to enforce any judgment obtained outside India against us, the

Placement Agents or any of their directors and executive officers in India respectively, except by way of

a law suit in India.

The enforcement of civil liabilities by overseas investors in the Equity Shares, including the ability to effect

service of process and to enforce judgments obtained in courts outside of India may be adversely affected

by the fact that the Company is incorporated under the laws of the Republic of India and all of its executive

officers and directors reside in India. As a result, it may be difficult to enforce the service of process upon

the Company and any of these persons outside of India or to enforce outside of India, judgments obtained

against the Company and these persons in courts outside of India.

India is not a party to any international treaty in relation to the recognition or enforcement of foreign

judgments. Recognition and enforcement of foreign judgments is provided for under Section 13, Section

14 and Section 44A of the Code of Civil Procedure, 1908 (“Civil Code”) on a statutory basis. Section 44A

of the Civil Code provides that where a certified copy of a decree of any superior court, within the meaning

of that Section, in any country or territory outside India which the Government has by notification declared

to be in a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment

had been rendered by a district court in India. However, Section 44A of the Civil Code is applicable only

to monetary decrees not being in the same nature of amounts payable in respect of taxes, other charges of

a like nature or in respect of a fine or other penalties and does not apply to arbitration awards (even if such

awards are enforceable as a decree or judgment).

The United Kingdom, United Arab Emirates, Singapore and Hong Kong, among others, have been declared

by the Government to be reciprocating territories for the purposes of Section 44A of the Civil Code. The

United States has not been declared by the Government of India to be a reciprocating territory for the

purposes of Section 44A of the Civil Code. A judgment of a court of a country which is not a reciprocating

territory may be enforced in India only by a suit upon the judgment under Section 13 of the Civil Code,

and not by proceedings in execution. Section 13 of the Civil Code provides that foreign judgments shall be

conclusive regarding any matter directly adjudicated upon except: (i) where the judgment has not been

pronounced by a court of competent jurisdiction; (ii) where the judgment has not been given on the merits

of the case; (iii) where it appears on the face of the proceedings that the judgment is founded on an incorrect

view of international law or refusal to recognize the law of India in cases to which such law is applicable;

(iv) where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where

the judgment has been obtained by fraud; and/ or (vi) where the judgment sustains a claim founded on a

breach of any law then in force in India. The suit must be brought in India within three years from the date

of judgment in the same manner as any other suit filed to enforce a civil liability in India.

Further, there are considerable delays in the disposal of suits by Indian courts. It may be unlikely that a

court in India would award damages on the same basis as a foreign court if an action is brought in India.

59

Furthermore, it may be unlikely that an Indian court would enforce foreign judgments if it viewed the

amount of damages awarded as excessive or inconsistent with public policy in India. A party seeking to

enforce a foreign judgment in India is required to obtain prior approval from the RBI under FEMA to

repatriate any amount recovered pursuant to execution and any such amount may be subject to income tax

in accordance with applicable laws. Any judgment or award in a foreign currency would be converted into

Indian Rupees on the date of the judgment or award and not on the date of the payment.

6. Rights of shareholders under Indian laws may differ from the laws of other jurisdictions.

Our Articles of Association and Indian law govern our corporate affairs. Indian legal principles related to

these matters and the validity of corporate procedures, Directors’ fiduciary duties and liabilities, and

shareholders’ rights may differ from those that would apply to a company in another jurisdiction.

Shareholders’ rights including in relation to class actions, under Indian law may not be as extensive as

shareholders’ rights under the laws of other countries or jurisdictions. Investors may have more difficulty

in asserting their rights as one of our shareholders than as a shareholder of a company in another

jurisdiction.

7. Any downgrade of India’s debt rating by an independent agency may adversely affect our ability to raise

financing.

Any adverse revisions to India’s credit ratings for domestic and international debt by international rating

agencies may adversely affect our ability to raise additional financing and the interest rates and other

commercial terms at which such additional financing is available. This could have an adverse effect on our

capital expenditure plans, business, financial condition and the price of our Equity Shares.

8. Fluctuation in the exchange rate between the Indian Rupee and foreign currencies may have an adverse

effect on the value of our Equity Shares, independent of our operating results.

Our Equity Shares are quoted in Indian Rupees on the Stock Exchanges. Any dividends in respect of our

Equity Shares will be paid in Indian Rupees and subsequently converted into the relevant foreign currency

for repatriation, if applicable. Any adverse movement in currency exchange rates during the time that it

takes to undertake such conversion may reduce the net dividend to foreign investors. In addition, any

adverse movement in currency exchange rates during a delay in repatriating outside India the proceeds

from a sale of Equity Shares, for example, because of a delay in regulatory approvals that may be required

for the sale of Equity Shares, may reduce the proceeds received by Shareholders. For example, the exchange

rate between the Rupee and the U.S. dollar has fluctuated substantially in recent years, and may continue

to fluctuate substantially in the future, which may have an adverse effect on the trading price of our Equity

Shares and returns on our Equity Shares, independent of our operating results.

RISKS RELATING TO THE ISSUE AND THE EQUITY SHARES

1. The Issue Price of the Equity Shares may not be indicative of the market price of the Equity Shares after

the Issue.

The Issue Price of the Equity Shares has been determined by our Company in accordance with applicable

prevailing regulations. This price has been determined on the basis of applicable law and may not be

indicative of the market price for the Equity Shares after the Issue. The market price of the Equity Shares

could be subject to significant fluctuations after the Issue, and may decline below the Issue Price. We

cannot assure you that you will be able to resell your Equity Shares at or above the Issue Price. There can

be no assurance that an active trading market for the Equity Shares will be sustained after this Issue, or that

the price at which the Equity Shares have historically traded will correspond to the price at which the Equity

Shares will trade in the market subsequent to this Issue.

2. The trading price of our Equity Shares may be subject to volatility and you may not be able to sell the

Equity Shares at or above the Issue Price.

The trading price of our Equity Shares may fluctuate after the Issue due to a variety of factors, including

our results of operations and the performance of our business, competitive conditions, general economic,

political and social factors, the performance of the Indian and global economy and significant developments

in India’s fiscal regime, economic liberalisation, deregulation policies and procedures or programs

60

applicable to our business, adverse media reports on our Company, volatility in the Indian and global

securities market, performance of our competitors, the Indian financial services industry and the perception

in the market about investments in the financial services industry, changes in the estimates of our

performance or recommendations by financial analysts and announcements by us or others regarding new

projects, strategic partnerships, joint ventures, or capital commitments. In addition, if the stock markets in

general experience a loss of investor confidence, the trading price of our Equity Shares could decline for

reasons unrelated to our business, financial condition or operating results. The trading price of our Equity

Shares might also decline in reaction to events that affect other companies in our industry even if these

events do not directly affect us. Each of these factors, among others, could adversely affect the price of our

Equity Shares.

3. Your ability to acquire and sell Equity Shares offered in the Issue is restricted by the distribution,

solicitation and transfer restrictions set forth in this Placement Document.

No actions have been taken to permit a public offering of the Equity Shares offered in the Issue in any

jurisdiction. As such, your ability to acquire Equity Shares offered in the Issue is restricted by the

distribution and solicitation restrictions set forth in this Placement Document. For further information, see

“Selling Restrictions” on page 145. Furthermore, the Equity Shares offered in the Issue are subject to

restrictions on transferability and resale. For further information, see “Purchaser Representations and

Transfer Restrictions” on page 152. You are required to inform yourself about and observe these

restrictions. Our representatives, our agents and us will not be obligated to recognize any acquisition,

transfer or resale of the Equity Shares offered in the Issue made other than in compliance with applicable

law.

4. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares and

dividend received.

Under current Indian tax laws, unless specifically exempted, capital gains arising from the sale of equity

shares in an Indian company is generally taxable in India. A securities transaction tax (“STT”) is levied on

and collected by an Indian stock exchange on which equity shares are sold. Further, any gain realized on

the sale of listed equity shares held for more than 12 months may be subject to long-term capital gains tax

in India at the specified rates depending on certain factors, such as whether the sale is undertaken on or off

the stock exchanges, the quantum of gains and any available treaty exemptions. Accordingly, you may be

subject to payment of long-term capital gains tax in India, in addition to payment of STT, on the sale of

any Equity Shares held for more than 12 months. Meanwhile, in addition to payment of STT, any gain

realized on the sale of listed equity shares held for a period of 12 months or less will be subject to short-

term capital gains tax in India.

In case of a non-resident shareholder, capital gains arising from the sale of equity shares of an Indian

company will be exempt from taxation in India in cases where the exemption from taxation in India is

provided under a treaty between India and the country of the shareholder residence who is initiating the

sale. However, Indian tax treaties generally do not limit India’s ability to impose tax on capital gains. As

such, selling shareholders that are residents of other countries may be liable for tax in India as well as in

their own jurisdiction on gains from the sale of the Equity Shares. However, depending on the prevailing

tax laws of such shareholder’s country of residence, the shareholder may be given tax credits for taxes

payable in India against the taxes paid by him or her in his or her country of residence, thereby reducing

such shareholder’s overall tax liability.

Further, the Finance Act, 2019, which has been notified with effect from April 1, 2019, stipulates the sale,

transfer and issue of securities through exchanges, depositories or otherwise to be charged with stamp duty.

The Finance Act has also clarified that, in the absence of a specific provision under an agreement, the

liability to pay stamp duty in case of sale of securities through stock exchanges will be on the buyer, while

in other cases of transfer for consideration through a depository, the onus will be on the transferor. The

stamp duty for transfer of securities other than debentures, on a delivery basis is specified at 0.015% and

on a non-delivery basis is specified at 0.003% of the consideration amount. These amendments have come

into effect from July 1, 2020.

The Finance Act, 2020 has also provided a number of amendments to the direct and indirect tax regime,

including, without limitation, a simplified alternate direct tax regime and that dividend distribution tax will

not be payable in respect of dividends declared, distributed or paid by a domestic company after March 31,

61

2020, and accordingly, such dividends would not be exempt in the hands of the shareholders, both resident

as well as non-resident.

Our Company cannot predict whether any tax laws or other regulations impacting it will be enacted or

predict the nature and impact of any such laws or regulations or whether, if at all, any laws or regulations

would have a material adverse effect the Company’s business, financial condition and results of operations.

5. Foreign investors are subject to foreign investment restrictions under Indian law that limit our

Company’s ability to attract foreign investors, which may adversely affect the market price of the Equity

Shares.

The foreign investment in our Company is governed by inter-alia the FEMA, as amended, the FEMA

Regulations, the FEMA Rules. A company based in India may issue equity instruments to a person resident

outside India subject to entry routes, sectoral caps and attendant conditionalities prescribed in the FEMA

Rules. Under these foreign exchange rules currently in force in India, transfers of our Equity Shares

between non-residents and residents and issuances of shares to non-residents by our Company are permitted

(subject to certain exceptions), subject to compliance with inter alia certain applicable pricing and reporting

requirements. If such issuances or transfers of shares are not in compliance with such requirements or fall

under any of the specified exceptions, then prior approval of the RBI will be required. Further, the

Government of India on April 22, 2020 amended the FEMA Rules pursuant to which any investment into

India under Rule 6 of the FEMA Rules by an entity of a country, which shares land border with India or

the beneficial owner of an investment into India who is situated in or is a citizen of any such country shall

require the approval of the Government of India.

In addition, shareholders who seek to convert the Indian Rupee proceeds from a sale of Equity Shares in

India into foreign currency and repatriate that foreign currency from India will require a no-objection or

tax clearance certificate from the income tax authority. Additionally, the Government of India may impose

foreign exchange restrictions in certain emergency situations, including situations where there are sudden

fluctuations in interest rates or exchange rates, where the Government of India experiences extreme

difficulty in stabilising the balance of payments, or where there are substantial disturbances in the financial

and capital markets in India. These restrictions may require foreign investors to obtain the Government of

India’s approval before acquiring Indian securities or repatriating the interest or dividends from those

securities or the proceeds from the sale of those securities. There can be no assurance that any approval

required from the RBI or any other government agency can be obtained on any particular terms, or at all.

6. The Equity Shares are subject to transfer restrictions.

The Equity Shares that are being offered are not required to be registered under the U.S. Securities Act.

Therefore, the Equity Shares may be transferred or resold only in a transaction registered under or exempted

from the registration requirements of the U.S. Securities Act and in compliance with any other applicable

securities laws. Pursuant to the SEBI Regulations, for a period of 12 months from the date of Allotment of

the Equity Shares in the Issue, QIBs subscribing Equity Shares in the Issue may only sell their Equity

Shares on BSE or NSE and may not enter into any off-market trading in respect of these Equity Shares.

There is no assurance that the restriction will not have an impact on the price and liquidity of the Equity

Shares.

7. Investors to the Issue are not allowed to withdraw or revise their Bids downwards after the Bid/ Issue

Closing Date.

In terms of the SEBI Regulations, investors in the Issue are not allowed to withdraw their Bids or revise

their Bids downwards after the Issue Closing Date. The Allotment of Equity Shares in this Issue and the

credit of such Equity Shares to the investor’s demat account with the depository participant could take

approximately seven days and up to 10 days from the Issue Closing Date. However, there is no assurance

that material adverse changes in the international or national monetary, financial, political or economic

conditions or other events in the nature of force majeure, material adverse changes in the business, results

of operation or financial condition of the Company, or other events affecting the investor’s decision to

invest in the Equity Shares, would not arise between the Issue Closing Date and the date of Allotment of

Equity Shares in the Issue. Occurrence of any such events after the Issue Closing Date could also adversely

impact the market price of the Equity Shares. The investors shall not have the right to withdraw their Bids

or revise their Bids downwards in the event of any such occurrence. The Company may complete the

62

Allotment of the Equity Shares even if such events may limit the investors’ ability to sell the Equity Shares

after the Issue or cause the trading price of the Equity Shares to decline.

8. There may not be an active or liquid market for our Equity Shares, which may cause the price of the

Equity Shares to fall and may limit your ability to sell the Equity Shares.

The price at which the Equity Shares will trade after this Issue will be determined by the marketplace and

may be influenced by many factors, including, our financial results and the financial results of the

companies in the businesses we operate in; the history of, and the prospects for, our business and the sectors

in which we compete; the valuation of publicly traded companies that are engaged in business activities

similar to us; and significant developments in India’s economic liberalization and deregulation policies.

The trading price of our Equity Shares might also decline in reaction to events that affect other companies

in our industry even if these events do not directly affect us. Each of these factors, among others, could

adversely affect the price of our Equity Shares. As a result, investors in the Equity Shares may experience

a decrease in the value of the Equity Shares regardless of our operating performance or prospects and may

limit your ability to sell the Equity Shares.

9. Investors will be subject to market risks until the Equity Shares credited to the investors’ demat account

are listed and permitted to trade.

Investors can start trading the Equity Shares Allotted to them only after they have been credited to an

investors’ demat account, are listed and permitted to trade. Since the Equity Shares are currently traded on

the Stock Exchanges, investors will be subject to market risk from the date they pay for the Equity Shares

to the date when Equity Shares Allotted are listed and permitted to trade. Further, there can be no assurance

that the Equity Shares Allotted to an investor will be credited to the investor’s demat account in a timely

manner or that trading in the Equity Shares will commence in a timely manner.

63

MARKET PRICE INFORMATION

As on the date of this Placement Document, 18,85,15,914 Equity Shares have been issued, subscribed and paid

up. The Equity Shares have been listed on BSE and NSE since September 20, 2011. The Equity Shares are listed

and actively traded on NSE under the symbol APLLTD and BSE under the scrip code 533573.

On July 31, 2020, the closing price of the Equity Shares on BSE and NSE was ₹985.30 and ₹985.05 per Equity

Share, respectively. Since the Equity Shares are available for trading on BSE and NSE, the market price and other

information for each of BSE and NSE has been given separately.

(i) The following tables set forth the reported high, low, average market prices and the trading volumes of the

Equity Shares on the Stock Exchanges on the dates on which such high and low prices were recorded and

the total trading turnover for Fiscals 2020, 2019 and 2018:

BSE

Fiscal High (₹) Date of

high

Number

of Equity

Shares

traded on

the date

of high

Total

turnover of

Equity

Shares

traded on

date of high

(₹ crores)

Low

(₹)

Date of

low

Number of

Equity

Shares

traded on

the date of

low

Total

turnover of

Equity

Shares

traded on

date of low

(₹ crores)

Average

price for the

year (₹)

2020 671.40 February

19, 2020

23,472 1.55 449.00 March 23,

2020

6,303 0.30 547.69

2019 649.15 September

26, 2018

4,048 0.26 415.90 June 5,

2018

8,734 0.37 555.74

2018 627.60 April 11,

2017

5,383 0.34 479.30 Septembe

r 20, 2017

6,463 0.31 537.66

(Source: www.bseindia.com)

NSE

Fiscal High (₹) Date of

high

Number

of

Equity

Shares

traded

on the

date of

high

Total

turnover of

Equity

Shares

traded on

date of high

(₹ crores)

Low

(₹)

Date of

low

Number

of Equity

Shares

traded on

the date

of low

Total

turnover of

Equity

Shares

traded on

date of low (₹

crores)

Average

price for the

year (₹)

2020 674.60 February

19, 2020

481,687 31.64 445.40 March 23,

2020

156,564 7.34 547.79

2019 654.25 September

21, 2018

171,702 11.10 418.15 June 5,

2018

7,035 0.30 556.26

2018 629.95 April 11,

2017

35,895 2.25 480.75 September

20, 2017

30,959 1.49 538.38

(Source: www.nseindia.com)

Note:

1. High, low and average prices are based on the daily closing prices. 2. In case of two days with the same closing price, the date with the higher volume has been chosen.

3. In the case of a year, average price for the year represents the average of the closing prices on each day of each year.

64

(ii) The following tables set forth the reported high, low and average market prices and the trading volumes of

the Equity Shares on the Stock Exchanges on the dates on which such high and low prices were recorded

during each of the last six months, as applicable:

BSE

Month,

year

High

(₹)

Date of

high

Numbe

r of

Equity

Shares

traded

on date

of high

Total

turnover

of Equity

Shares

traded on

date of

high (₹

crores)

Low (₹) Date of

low

Numbe

r of

Equity

Shares

traded

on

date of

low

Total

turnover

of Equity

Shares

traded on

date of low

(₹ crores)

Averag

e price

for the

month

(₹)

Equity Shares traded

in the month

Volume Turnover(₹i

n crores)

July 2020 1,014.

05

July 20,

2020

68,038 6.93 887.10 July 6,

2020

19,983 1.79 953.88 768,499 75.22

June 2020 945.95 June 19,

2020 49,099 4.58 800.60

June 9,

2020 19,944 1.63 881.57 481,586 43.22

May 2020 897.65 May 21,

2020 17,319 1.54 751.75

May 5,

2020 10,241 0.78 831.55 362,527 30.51

April 2020 817.90 April 27,

2020 107,653 8.72 537.70

April 3,

2020 19,084 1.04 665.59 618,833 45.31

March

2020 659.25

March

03, 2020 14,780 0.97 449.00

March

23,

2020

6,303 0.30 563.20 282,696 16.79

February

2020 671.40

February

19, 2020 23,472 1.55 617.70

Februar

y 4,

2020

7,861 0.49 642.53 183,535 11.91

(Source: www.bseindia.com)

NSE

Month,

year High (₹)

Date of

high

Number

of

Equity

Shares

traded

on date

of high

Total

turnover of

Equity

Shares

traded on

date of high

(₹ crores)

Low

(₹)

Date of

low

Numbe

r of

Equity

Shares

traded

on date

of low

Total

turnover of

Equity

Shares

traded on

date of low

(₹ crores)

Averag

e price

for the

month

(₹)

Equity Shares traded

in the month

Volume

Turnover

(₹ in

crores)

July

2020

1,011.45 July 20,

2020

942,698 96.02 887.50 July 6,

2020

223195 20.00 953.88 12,849,38

5

1,257.69

June

2020 946.50

June 19,

2020 682,717 63.87 800.60

June 9,

2020 574,819 47.24 881.54 8,828,654 785.31

May

2020 898.05

May 22,

2020 808,034 72.41 750.80

May 5,

2020 480,970 36.85 831.17 9,089,310 754.00

April

2020 817.30

April 27,

2020

2,271,52

8 184.02 533.45

April 1,

2020 142,618 7.66 665.06

14,393,22

6 1,051.25

March

2020 661.20

March, 3,

2020 191,933 12.65 445.40

March

23,

2020

156,564 7.34 562.46 3,766,427 213.48

Februar

y 2020 674.60

February

19, 2020 481,687 31.64 617.50

Februar

y 4,

2020

146,448 9.09 642.70 4,586,367 296.14

(Source: www.nseindia.com)

Note:

1. High, low and average prices are based on the daily closing prices.

2. In case of two days with the same closing price, the date with the higher volume has been chosen.

3. In the case of a month, average price for the month represents the average of the closing prices on each day of each month.

(iii) The following table set forth the details of the number of Equity Shares traded on the Stock Exchanges

and the turnover during Fiscals 2020, 2019 and 2018:

65

Fiscal Number of Equity Shares Traded Turnover (In ₹ crores)

BSE NSE BSE NSE

2020 2,655,369 28,711,651 154.52 1,661.71

2019 2,940,097 19,988,254 169.58 1,116.08

2018 2,508,007 17,400,363 139.32 942.26 (Source: www.bseindia.com and www.nseindia.com)

(iv) The following tables set forth the market price on the Stock Exchanges on July 28, 2020, being the first

working day following the approval of the Board for the Issue:

BSE

Open High Low Close Number of Equity Shares traded Volume

(₹ crores)

967.00 982.75 963.30 976.45 13,312 1.30 (Source: www.bseindia.com)

NSE

Open High Low Close Number of Equity Shares traded Volume

(₹ crores)

970.00 982.00 963.00 977.85 4,24,039 41.27 (Source: www.nseindia.com)

66

USE OF PROCEEDS

The gross proceeds of this Issue are approximately ₹750.00 crore. The net proceeds of this Issue, after deducting

fees, commissions and expenses relating to this Issue are approximately ₹733.57 crore (“Net Proceeds”).

Purpose of this Issue

Our Company proposes to utilize the Net Proceeds for funding growth and expansion opportunities, working

capital requirements, pre-payment and /or repayment of outstanding borrowings and general corporate purposes,

as may be permissible under the applicable law and approved by our Board or a duly constituted committee

thereof.

The Net Proceeds are proposed to be deployed towards the purpose set out above and are not proposed to be

utilized towards any specific project. Accordingly, the requirement to disclose (i) the break-up of cost of the

project (ii) means of financing such project, and (iii) proposed deployment status of the proceeds at each stage of

the project, is not applicable.

Our Company intends to deploy the entire Net Proceeds towards the purpose set out above by March 31, 2022.

The proposed deployment of funds from the Net Proceeds are based on internal management estimates based on

current market conditions and have not been appraised by any bank or financial institution or other independent

agency. Our Company may have to revise these estimates from time to time on account of various factors beyond

our control, such as market conditions, competitive environment, costs of commodities, interest or exchange rate

fluctuations.

In accordance with applicable laws, we undertake to not utilize proceeds from the Issue unless Allotment is made

and the corresponding return of Allotment is filed with the RoC, or final listing and trading approvals are received

from each of the Stock Exchanges, whichever is later.

As permissible under applicable laws, our Company’s management will have flexibility in deploying the Net

Proceeds. The amounts and timing of any expenditure will depend on, among other factors, the amount of cash

generated by our operations, competitive and market developments and the availability of acquisition or

investment opportunities on terms acceptable to us. Pending utilization of the Net Proceeds, our Company intends

to invest the funds in creditworthy instruments, including money market, mutual funds, and deposits with banks.

Such investments will be in accordance with the investment policies approved by the Board and/ or a duly

authorized committee of the Board, from time to time, and in accordance with applicable laws.

Our Company shall disclose the utilization of funds raised through QIP in its annual report every year until such

funds are fully utilized.

Neither our Promoters nor our Directors are making any contribution either as a part of this Issue or separately in

furtherance of the use of the Net Proceeds.

67

CAPITALISATION STATEMENT

The following table sets forth the capitalisation of our Company, on a consolidated basis, as at March 31, 2020

and as adjusted to give effect to the Issue.

This table should be read in conjunction with “Risk Factors” and “Management’s Discussion and Analysis of

Financial Condition and Results of Operations” on pages 35 and 73, respectively.

(₹ in crore, except ratio)

Particulars As at March 31, 2020

(on a consolidated basis)

As adjusted for the Issue

(on a consolidated basis)*

Indebtedness

Short-term Borrowings

- Secured borrowings 0.04 0.04

- Unsecured borrowings 860.46 860.46

Long-term Borrowings

- Secured borrowings

- Unsecured borrowings 886.99 886.99

Total Indebtedness (A) 1,747.49 1,747.49

Shareholders’ Funds

- Equity Share Capital 37.70 39.31

- Other Equity 3,181.71 3,930.10

Total Shareholders’ Funds (B) 3,219.41 3,969.41

Total Capitalisation (A+B) 4,966.90 5,716.90

Debt/Equity ratio 0.54 0.44

*Note- The figures for the respective financial statements line items under post-Issue column are derived after considering the proposed impact

due to the Issue (assuming that the Issue is subscribed as per terms in accordance with the resolution approved by the Fund Raising Committee

of the Board of Directors at their meeting dated August 3, 2020) and not considering any other transactions or movements for such financial statements line items after March 31, 2020. Accordingly, the post-Issue column has been adjusted to reflect the number of Equity Shares proposed

to be issued pursuant to the Issue and the related proceeds from the Issue. The aforesaid amounts do not include any Issue related expenses.

68

CAPITAL STRUCTURE

The equity share capital of our Company, as at the date of this Placement Document, is set forth below:

(In ₹ crore, except Equity Share data)

Aggregate value at face value#

A AUTHORISED SHARE CAPITAL^

20,00,00,000 Equity Shares 40.00

B ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE THE ISSUE

18,85,15,914 Equity Shares 37.70

C PRESENT ISSUE IN TERMS OF THIS PLACEMENT DOCUMENT(1)

80,47,210 Equity Shares aggregating to approximately ₹750.00 crore 1.61

D PAID-UP CAPITAL AFTER THE ISSUE

19,65,63,124 Equity Shares 39.31

E SHARE PREMIUM ACCOUNT

Before the Issue Nil

After the Issue(2) 748.39 1. The Issue has been authorised by the Board of Directors pursuant to its resolution passed on May 22, 2020 and July 27, 2020. The Shareholders

have authorised and approved the Issue by way of a special resolution passed at their AGM held on July 22, 2020. 2. The securities premium account after the Issue is calculated on the basis of Gross Proceeds

# Except for share premium account. ^ The records currently maintained by the RoC, erroneously indicate the authorised share capital of our Company to be ₹48 crores. Our Company

has written to the RoC on multiple occasions, requesting for this error to be rectified in the RoC master data, including by way of its letter dated October 22, 2019.

Equity share capital history of our Company

The following table sets forth details of allotments of Equity Shares by our Company, since incorporation:

Date of

allotment

No. of equity

shares

allotted

Cumulative

No. of equity

shares

Face

value

(In ₹)

Issue price

per equity

share (In

₹)

Reason for allotment

Nature of

consideration

(Cash/Other

than cash)

June 22, 2010 2,50,000 2,50,000 2 2 Initial subscription to the

Memorandum of

Association

Cash

June 28, 2010 5,47,50,000 5,50,00,000 2 2 Further issue Cash

April 15, 2011 13,35,15,914 18,85,15,914 2 - Allotment of equity

shares pursuant to the

Scheme of Demerger

approved by the High

Court of Gujarat

pursuant to an order

dated January 24, 2011,

in the ratio of one Equity

Share each by our

Company, for every one

equity share held by the

shareholders of Alembic

Limited

Other than

cash

Proposed Allottees in the Issue

In compliance with the requirements of Chapter VI of the SEBI Regulations, Allotment shall be made by our

Company, in consultation with the BRLMs, to Eligible QIBs only, on a discretionary basis.

69

The names of the proposed Allottees and the percentage of Post-Issue capital that may be held by them is set forth

below:

Sr. No. Name of the proposed Allottees

Percentage of the

Post-Issue share

capital held (%)^# 1. TATA MULTICAP FUND 0.17

2. TATA RETIREMENT SAVINGS FUND-PROGRESSIVE PLAN 0.08

3. TATA RETIREMENT SAVINGS FUND-MODERATE PLAN 0.10

4. TATA RETIREMENT SAVINGS FUND-CONSERVATIVE PLAN 0.00

5. TATA VALUE FUND - SERIES 1 0.07

6. TATA VALUE FUND - SERIES 2 0.03

7. TATA MID CAP GROWTH FUND 0.08

8. TATA MUTUAL FUND -TATA EQUITY P/E FUND 0.67

9. HDFC LIFE 0.82

10. RELIANCE CAPITAL TRUSTEE COMPANY LTD - A/C NIPPON INDIA GROWTH FUND 0.19

11. BARODA DYNAMIC EQUITY FUND 0.04

12. BARODA ELSS 96 FUND 0.01

13. BARODA EQUITY SAVING FUND 0.00

14. BARODA HYBRID EQUITY FUND 0.02

15. BARODA MIDCAP FUND 0.01

16. BARODA MULTICAP FUND 0.04

17. BARODA CONSERVATIVE HYBRID FUND 0.00

18. MAHINDRA MANULIFE ELSS KAR BACHAT YOJANA 0.02

19. MAHINDRA MANULIFE MID CAP UNNATI YOJANA 0.05

20. MAHINDRA MANULIFE TOP 250 NIVESH YOJANA 0.02

21. PGIM INDIA TRUSTEES PRIVATE LIMITED A/C PGIM INDIA LARGE CAP FUND 0.03

22. PGIM INDIA TRUSTEES PRIVATE LIMITED A/C PGIM INDIA HYBRID EQUITY FUND 0.01

23. PGIM INDIA TRUSTEES PRIVATE LIMITED A/C PGIM INDIA MID CAP OPPORTUNITIES

FUND 0.01

24. PGIM INDIA TRUSTEES PRIVATE LIMITED A/C PGIM INDIA DIVERSIFIED EQUITY FUND 0.01

25. LIC LARGE & MID CAP FUND 0.05

26. UTI HEALTHCARE FUND 0.03

27. EDELWEISS TOKIO LIFE INSURANCE CO LTD EQUITY MIDCAP FUND 0.01

28. EDELWEISS TOKIO LIFE INSURANCE CO LTD EQUITY TOP 250 FUND 0.00

29. VESPERA FUND LIMITED 0.12

30. IDFC CORE EQUITY FUND 0.08

31. IDFC MULTICAP FUND 0.40

32. IDFC STERLING VALUE FUND 0.12

33. BAJAJ ALLIANZ LIFE INSURANCE COMPANY LTD 0.27

34. SUNDARAM INDIA MIDCAP FUND 0.04

35. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP SERIES I 0.01

36. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP - SERIES II 0.01

37. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP - SERIES III 0.01

38. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP - SERIES IV 0.01

39. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP - SERIES V 0.00

40. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP - SERIES VI 0.00

41. SUNDARAM MUTUAL FUND A/C SUNDARAM EMERGING SMALL CAP-SERIES VII 0.00

42. SUNDARAM MUTUAL FUND A/C SUNDARAM SELECT MICRO CAP SERIES - XII 0.01

43. SUNDARAM MUTUAL FUND A/C SUNDARAM SELECT MICRO CAP SERIES - XIV 0.01

44. SUNDARAM MUTUAL FUND A/C SUNDARAM SELECT MICRO CAP SERIES - XV 0.00

45. SUNDARAM MUTUAL FUND A/C SUNDARAM SELECT MICRO CAP SERIES - XVI 0.00

46. SUNDARAM MUTUAL FUND A/C SUNDARAM SELECT MICRO CAP - SERIES - XVII 0.00

47. SUNDARAM MUTUAL FUND A/C SUNDARAM LONG TERM TAX ADVANTAGE FUND -

SERIES - III 0.00

48. SUNDARAM MUTUAL FUND A/C SUNDARAM LONG TERM TAX ADVANTAGE FUND -

SERIES IV 0.00

49. SUNDARAM MUTUAL FUND A/C SUNDARAM LONG TERM MICRO CAP TAX

ADVANTAGE FUND SERIES V 0.00

50. SUNDARAM MUTUAL FUND A/C SUNDARAM LONG TERM MICRO CAP TAX

ADVANTAGE FUND - SERIES - VI 0.00

51. SUNDARAM MUTUAL FUND A/C SUNDARAM MID CAP FUND 0.27

52. INDIA OPPORTUNITIES GROWTH FUND LTD PINEWOOD STRATEGY 0.14

70

^ The shareholding data is based on the beneficiary position data of the Company as on June 30, 2020 and includes the Allocation made in the Issue.

# The post-Issue shareholding pattern (in percentage terms) of the proposed Allottees has been disclosed on the basis of their respective DP

ID and Client ID.

Note:

(i) Subject to receipt of funds and allotment in this Issue.

Pre-Issue and Post-Issue shareholding pattern:

Sr. No. Category

Pre-Issue as of June 30, 2020 Post-Issue

Number of Equity

Shares held

% of share

holding

Number of Equity

Shares held*

% of share

holding

A. Promoter’s holding#

1. Indian

Individual 96,64,175 5.13 96,64,175 4.92

Bodies corporate 12,68,88,818 67.31 12,68,88,818 64.55

Sub-total 13,65,52,993 72.44 13,65,52,993 69.47

2. Foreign promoters

Individual 10,06,980 0.53 10,06,980 0.51

Bodies corporate - - - -

Sub-total 10,06,980 0.53 10,06,980 0.51

Sub-total (A) 13,75,59,973 72.97 13,75,59,973 69.98

B. Non - Promoter’s holding

3. Institutional investors 2,71,40,688 14.40 3,51,87,898 17.90

4. Non-institutional investors - - - -

(a) Bodies Corporates (including

private corporate bodies, if

any)

8,38,810 0.45 8,38,810 0.43

(b) Directors and relatives 24,234 0.01 24,234 0.01

(c) Resident individuals (including

Indian public, if any)

2,04,23,568 10.83 2,04,23,568 10.39

(d) Others [including Non-resident

Indians (NRIs)]

25,28,641 1.34 25,28,641 1.29

Sub-total (B) 5,09,55,941 27.03 5,90,03,151 30.02

Total (A+B) 18,85,15,914 100.00 19,65,63,124 100.00 # Includes the shareholding of the members forming part of Promoter Group.

* The post-Issue shareholding pattern of our Company reflects the shareholding of the institutional investors category on basis of the

Allocation made in the Issue, and reflects the shareholding of all other categories as of June 30, 2020.

No change in control in our Company will occur consequent to the Issue.

Other confirmations

• Our Company has not allotted securities on preferential basis or private placement or by way of rights issue

in the last one year preceding the date of this Placement Document.

• Our Company has not made any allotments for consideration other than cash, in the last one year preceding

the date of this Placement Document.

• Our Equity Shares have been listed for a period of at least one year prior to the date of issuance of the AGM

notice dated May 22, 2020, to the Shareholders for the approval of this Issue.

• Our Company shall not make any subsequent qualified institutions placement until the expiry of two weeks

from the date of this Issue. Further, Equity Shares allotted pursuant to this Issue shall not be sold by the

Allottee for a period of one year from the date of allotment, except on the Stock Exchanges.

71

RELATED PARTY TRANSACTIONS

For details of the related party transactions as per the requirements under Ind AS 24, as notified under section 133

of the Companies Act, 2013 read with Ind AS rules as amended for Fiscals 2020, 2019 and 2018, see “Financial

Statements” on page 180.

72

DIVIDENDS

The declaration and payment of final dividend, if any, will be recommended by our Board and approved by our

Shareholders at their discretion, subject to the provisions of the Articles of Association and the applicable laws,

including the Companies Act.

Our Board may also, from time to time, declare interim dividends. Our Board has approved and adopted a formal

dividend distribution policy in terms of Regulation 43A of the SEBI Listing Regulations, effective from July 29,

2016. For further information, see “Description of the Equity Shares” on page 157.

Details of dividends declared by our Company in Fiscals 2020, 2019, and 2018, are set out below:

Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018

Face value of Equity Shares (in ₹ per share) 2.00 2.00 2.00

Dividend (Interim) per share (in ₹) 7.00 0.00 0.00

Dividend (Special) per share (in ₹) 3.00 0.00 0.00

Dividend (Final) per share (in ₹) 0.00 5.50 4.00

Total Dividend per share (in ₹) 10.00 5.50 4.00

Total Dividend (₹ in crores) 188.52 103.68 75.41

Dividend Rate (in %) 500 275 200

Dividend distribution tax (₹ in crores) 12.46 21.31 15.50

The amounts declared as dividend in the past are not necessarily indicative of dividend which may be declared by

our Company, if any, in the future. There is no guarantee that any dividends will be declared or paid in the future.

For a summary of some of the restrictions that may materially affect our ability to declare or pay dividends, see

“Risk Factors” on page 35.

The Equity Shares to be issued in connection with this Issue shall qualify for dividend declared in respect of the

Fiscal in which they have been Allotted. However, investors are cautioned to not rely on past dividends as an

indication of the future performance of our Company or for an investment in the Equity Shares offered in the

Issue.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following discussion and analysis of our financial condition and results of operations for Fiscals 2018, 2019

and 2020 included herein is derived from and should be read together with the Audited Consolidated Financial

Statements, included in this Placement Document. For further information, see “Selected Financial Information”

and “Financial Statements” on pages 31 and 180, respectively. Unless otherwise specified, all financial

information is presented on a consolidated basis.

This discussion contains forward-looking statements and reflects our current views with respect to future events

and financial performance. Actual results may differ materially from those anticipated in these forward-looking

statements as a result of certain factors such as those described under “Forward-Looking Statements” and “Risk

Factors” beginning on pages 14 and 35, respectively, and elsewhere in this Placement Document.

Our Fiscal ends on March 31 of each year. Accordingly, all references to a particular Fiscal are to the 12 months

ended March 31 of that year.

We prepare our financial statements in accordance with Indian Accounting Standards (Ind AS) notified under the

Companies (Indian Accounting Standards) Rules, 2015 (as amended). The financial statements reflect applicable

statutory requirements, regulatory guidelines and accounting practices in India. These requirements, guidelines

and practices change from time to time and, in accordance with (Ind AS), adjustments to reflect such changes are

made on a prospective basis. For the purposes of a comparative analysis in the discussion below, previous years’

figures have been reclassified wherever necessary.

Overview

We are a vertically integrated pharmaceutical company, developing, manufacturing and marketing of formulations

offered in the international markets including in markets such as the United States, European Union, etc

(“International Generics”), formulations which cater to India’s domestic formulations market (“Domestic

Formulations”) and active pharmaceutical ingredients which cater to both domestic and international markets

(“APIs”). We have a presence and sell our products in over 65 countries including the United States, India,

Europe, Canada, Australia, Brazil and South Africa. We provide a diverse suite of products under each of our

business verticals - International Generics, Domestic Formulation and APIs. Our product portfolio in the Domestic

Formulations covers numerous chronic and acute therapy areas and in the International Generics, our products

and products in pipeline include oral solids, dermatology, oncology oral solids, oncology injectables, general

injectables and ophthalmology. For Fiscal 2020, we derived 53.69%, 30.95% and 15.36% of our revenue from

operations from our International Generics, Domestic Formulations and APIs business, respectively.

We have a broad portfolio of Abbreviated New Drug Applications (“ANDAs”) for our International Generic

business filed with the United States Food and Drug Administration (“USFDA”). As of June 30, 2020, we have

received approval for 125 ANDAs including 14 ANDAs which have received tentative approval from USFDA.

Our filings in the United States focus on oral solids (oncology and non-oncology), injectable products (oncology

and non-oncology), ophthalmic and dermatological. As of March 31, 2020, we had successfully launched 76

products in the United States, which we sell through pharmacy chains, wholesalers and distributors. We

manufacture APIs for captive consumption as well as for selling to the customers in domestic and international

markets. As of March 31, 2020, we have filed 123 Drug Master Files (“DMFs”) with the USFDA for our API

products in multiple therapeutic areas, out of which 109 DMFs are active.

We have a presence in the Domestic Formulations market which caters to chronic and acute therapies including

cardiology, anti-diabetic, gynaecology, gastrology, dermatology, orthopaedic, ophthalmology, nephrology /

urology, anti-infective, cold and cough, and veterinary segment.

We rank 21 in Indian Pharma Market (“IPM”) as of March 31, 2020 (Source: March MAT data of IQVIA, TSA

March 2020) with a 1.5% market share in IPM (Source: IQVIA, TSA March 2020). Further, three of our brands

featured amongst the top 300 pharmaceutical brands in India (Source: IQVIA, TSA March 2020).

We operate three R&D centres located at Vadodara (Gujarat, India), Hyderabad (Telangana, India) and at West-

Caldwell (New Jersey, United States). We also have a USFDA approved Bioequivalence Centre, located at

Vadodara (Gujarat, India) which provides support for bioavailability (BA) and bioequivalence (BE) studies and

support our R&D activities. As of March 31, 2020, we employed about 1,100 professionals in our R&D centres

74

working on APIs and various dosage forms of formulations. Some our R&D efforts are also focused on developing

niche, specialty products to strengthen our product offerings. We dedicate a substantial portion of our revenue

from operations towards R&D activities. Our R&D spend as a percentage to revenue from operations has increased

from 5.92% in Fiscal 2015 to 14.00% in Fiscal 2020.

Further, owing to our strong R&D, we have been granted 911 patents worldwide (for both APIs and formulations),

including patents which have been withdrawn, abandoned or have lapsed, as of March 31, 2020.

We have one facility engaged in the manufacturing of Domestic Formulations located in Sikkim. Two of our

facilities are engaged in the manufacturing of International Generic formulations located in Gujarat out of which

one facility is operated by our joint venture. Three of our facilities for manufacturing APIs are located in Gujarat.

All these facilities are currently commercially operational. The manufacturing units which are responsible for

manufacturing our products which are sold in regulated markets (including the United States, Canada, United

Kingdom), comply with applicable regulations and standards and also comply with the targeted markets’

regulatory requirements, for example that of, USFDA’s current Good Manufacturing Practices (“CGMPs”), the

United Kingdom’s medicines and healthcare products regulatory agency (“MHRA”), the Brazilian Health

Regulatory Agency (“ANVISA”), European Directorate for Quality of Medicines (“EDQM”), Australian

Therapeutic Goods Administration (“TGA”), etc. As on date, the Establishment Inspection Report (“EIR”) from

USFDA is in place for each of our operational facilities, where applicable. For more details regarding our

manufacturing facilities, see “Manufacturing Process and Facilities” on page 113.

Driven by a strong management team, our consolidated revenue from operations for Fiscal 2020 was ₹ 4,605.75

crores which was up by 17.06%, compared to ₹ 3,934.68 crores for Fiscal 2019. Our Consolidated PAT for Fiscal

2020 grew by 41.83% to ₹ 828.82 crores from ₹ 584.37 crores for Fiscal 2019.

Factors affecting our Financial Results

The following is a discussion of certain factors that have had, and continue to have, a significant effect on our

financial results:

Revenue Generation

We earn our revenue from domestic sale and export of our products. We derive a significant portion of our revenue

from our export sales. Also, we continuously endeavor to provide quality products to our customers. Accordingly

any decrease in our exports may affect our revenues and these may be impacted by such quality products.

Strengthen our Domestic Formulations business through consolidating our presence and venturing into new

fast growth therapy segments

We develop, manufacture and commercialize branded pharmaceutical products in select therapeutic areas within

the chronic and acute categories of the Indian pharmaceutical market. Our Domestic Formulations business

accounted for 30.95%, 35.13% and 40.69% for Fiscals 2020, 2019 and 2018, respectively and continues to be a

significant part of our growth strategy in the future. Further, we have been increasing our presence in the specialty

therapies, including cardiology, diabetes, gynecology, ophthalmology and veterinary. Specialty remains our key

focus area with 64.92% share of our consolidated revenue and acute segments consisting of cough and cold and

anti-infective therapies with 35.08% share of our revenue from operations for Fiscal 2020.

Our strategy for expansion in existing and new therapeutic areas includes extending our focus to target lifestyle

disorders and the chronic category (to target products that have to be prescribed over an extended period of time

as opposed to one time incidence related medication), identifying gaps in existing interventions, analyzing patient

compliance, and working with key opinion leaders, doctors and patients through active engagement to develop,

manufacture and market new indications which fulfil an unmet need or are clinically differentiated.

We believe that this focused sales strategy has in the past helped us and will continue to help us in enhancing

emphasis on specialist coverage. Further, we intend to continue updating our portfolio in India, which we believe

would allow us to strengthen our position in the market. If we are unable to expand and strengthen our Domestic

Formulations business through these strategies, it may affect our results of operations.

Expand and improve our United States formulations products portfolio

75

Our strategy in the United States is to continue to focus on the existing and new formulations and enhance our

product portfolio by accelerating ANDA filings. Our US formulations business has grown to ₹ 1,976.00 crores in

Fiscal 2020, accounting for 42.90% of total revenue on a consolidated basis for the Fiscal. US formulation

business remains a significant growth engine for us. We wish to offer a comprehensive range of products under

dermatology, oncology and ophthalmology therapies and cater to the strong demand in US generics segment. Our

focus is on developing complex, niche products having limited competition.

The specific timing of our new product launches is subject to a variety of factors, some of which are beyond our

control including the timing of USFDA approval for ANDAs currently under review or that we file with respect

to new products with the USFDA or other regulators. The timing of these and other new product launches may

have a significant impact on our results of operations.

Expiring Patents

Our operations are also directly relates to the expiry of patents for pharmaceutical products. As existing patents

held by other pharmaceutical companies expire, we can commence the marketing and sale of generic versions of

such products, subject to approval from concerned regulatory authority. Alternatively, certain regulatory

authorities such as the USFDA grant periods of exclusivity to generic drug companies that are the “first to file”

applications for the marketing and sale of their pharmaceutical formulations. Our ability to develop marketable

generic versions of pharmaceutical formulation going “off-patent” in a cost effective, efficient and timely manner,

and to protect such generic versions from legal challenges, may affect our results of operations.

Efficient production across the manufacturing facilities with focus on quality assurance

Our ability to increase our cost efficiency is dependent on the efficient management of our production costs. The

availability of key raw materials at competitive prices is critical and price fluctuations may adversely affect our

margins and, as a result, our results of operations. Any unavailability of these raw materials would impact our

production.

In addition, in order to increase our profits, we have maintained robust quality system across the organisation to

ensure absolute compliance. Attaining and maintaining this level of quality requires considerable expense and

planning. If we are unable to achieve and preserve the necessary level of quality in our manufacturing processes

and facilities in the future, our financial condition and results of operations may be adversely affected.

Research and Development

We are a R&D focused company and we believe that our strong R&D expertise is critical for our success in

International Generics business. This process is both time consuming and costly, and involves a high degree of

business risk. To develop our product pipeline, we commit substantial time, funds and other resources. Our

investment in research and development for future products could result in higher costs without a proportionate

increase in revenues. In addition, we must adapt to rapid changes in our industry due to technological advances

and scientific discoveries. If we are unable to cope up with these changes, our business and results of operations

could be adversely affected.

Although we strive to keep our technology, facilities and machinery current with the latest international standards,

the technologies, facilities and machinery we currently employ may become obsolete. The cost of implementing

new technologies, upgrading our manufacturing facilities and retaining our research staff could be significant and

could adversely affect our profitability.

Regulatory approvals

We intend to broaden our revenue base in India as well as several in existing geographies by increasing our

existing product portfolio in various markets. As a result, our products are subject to regulation by numerous

Indian and foreign regulatory agencies. Each of these agencies requires us to comply with laws and regulations

governing the development, testing, manufacturing, labelling, marketing and distribution of our products and we

are required to maintain various approvals, licenses, registrations and permissions for our business activities.

Our business, prospects, results of operations and financial condition could be adversely affected if we fail to

76

obtain, or comply with applicable conditions that may be attached to, our approvals, licenses, registrations and

permissions. We continue to file for approvals for our new products with various other government and regulatory

agencies. Any delay in the grant of approvals for new products, or any withdrawal of approval for existing

products would adversely affect our results of operations.

Competition

Our products are exposed to intense competition from products commercialized or under development by

competitors in all our therapeutic areas across geographies. Our business, prospects, results of operations and

financial condition could be adversely affected if our competitors gain significant market share in areas in which

we are focused. Many of our competitors may have greater financial, manufacturing, research and development,

marketing and other resources, more experience in obtaining regulatory approvals, greater geographic reach,

broader product ranges and stronger sales forces. Further, in global markets, we compete with local companies,

multinational corporations and companies from other emerging markets. In addition, as we grow our International

Generics business, we expect competition from major international generic manufacturers. We also operate in a

rapidly consolidating industry. Our competitors are consolidating, and the strength of the combined companies

could affect our competitive position in all of our business areas.

Accordingly, our results of operations depend significantly on various factors such as the demand for our products

in the markets we operate in, our ability to manage our growth strategy and expansion plans, including our ability

to grow our exports and our ability to grow and manage our distribution network in India.

Foreign currency exchange fluctuations

Our products are typically priced in Indian Rupees for our sales in India, in U.S. Dollars for sales in the United

States and in Euros for sales in the European countries. Similarly, for other jurisdictions where we sell our

products, we price the products in other freely convertible currencies in accordance with local convention. A

portion of our costs, including labour, raw materials, packing materials, transportation costs and capital

expenditures are incurred in currencies other than Indian Rupees. Additionally, we also procure a portion of our

inventory and incur capital expenditures from outside India and, as a result, incur such costs in currencies other

than Indian Rupees. As a consequence, we are exposed to currency rate fluctuations between the Indian Rupee

and U.S. dollars and other foreign currencies.

Impact of Covid-19

The COVID-19 pandemic and the preventative or protective actions that governments around the world have

taken to counter the effects of the pandemic have resulted in a period of economic downturn and business

disruption in India, as well as in countries where our customers and suppliers are located. The World Health

Organization declared the outbreak of COVID-19 to be a public health emergency of international concern on

January 30, 2020, and a global pandemic on March 11, 2020. On March 24, 2020, the Government of India

ordered a national lockdown in response to the spread of COVID-19.

While our business has not been materially affected adversely by the current wave of the pandemic, the global

impact of the outbreak has been rapidly evolving. As cases of COVID-19 have continued to be identified in

various countries, many jurisdictions, including the governments of India, the United States and the other markets

in which we conduct business, have reacted by instituting restrictive measures including invoking lock downs

and quarantines, requiring the closure of non-essential businesses and placing restrictions on the types of

businesses that may continue to operate. Although we have been declared an essential business and have been

able to adjust our business to continue operating during the lockdown, there was no significant impact of COVD-

19 on our financial condition and results of operations for the financial year 2020. However, events beyond our

control may unfold in the future, which makes it difficult for us to predict the impact that COVID-19 will have

on us, our customers or suppliers in the future. We continue to closely monitor the effect that COVID-19 may

have on our business and results of operations. To the extent, the COVID-19 pandemic adversely affects us, it

may also significantly increase the effect of the aforementioned factors affecting our results of operations.

Components of Income and Expenditure

The principal components of our income and expenditure are explained below.

Total Income: Our total income comprises of revenue from operations and other income.

77

Revenue from operations

Our Revenue from operations majorly comprises of revenue from domestic sales and export of our products.

Revenue from operations also includes export incentives, royalty and other miscellaneous operating revenue.

Other Income

Our other Income comprises of dividend received, insurance claims, lease rent income, profit on sale of assets,

profit on sale of investments, interest income and other miscellaneous income.

Total Expenses: Our total expenses comprise of cost of materials consumed, purchase of stock-in trade, changes

in inventories of finished goods, stock-in trade and work-in-progress, employee benefit expenses, finance cost,

Depreciation and Amortisation Expenses and other expenses.

Cost of Materials Consumed

Cost of material consumed comprises the opening stock and purchase of raw and packing materials during the

year and is reduced by closing stock, during our production process.

Purchase of Stock-in trade

Purchase of stock-in trade comprises of purchases of goods in a particular year.

Changes in Inventories

Changes in inventories of finished goods and work-in-progress, comprises the change in opening and closing

stock of the finished goods and work-in-progress manufactured by us. Change in stock in trade comprises of

change in opening and closing stock of the same.

Employee Benefit Expenses

Our employee benefit expense includes salaries and wages, contribution to provident and other funds, and staff

welfare expenses.

Finance Costs

Our finance costs comprise of interest on term loans taken from banks, interest on non-convertible debentures

and interest on other financial liabilities.

Depreciation and Amortisation Expenses

Property, plant and equipment and intangible assets are depreciated and amortised over periods corresponding to

their estimated useful lives.

Other Expenses

Our other expenses primarily include consumption of stores, spares, laboratory material and analytical expense;

power and fuel; sales promotion, service fees and commission; freight and forwarding charges; travelling

expenses; legal & professional fees and external research & development.

Significant Accounting Policies

Our significant accounting policies are summarized below:

1. Statement of compliance

Our Audited Consolidated Financial Statements are prepared in accordance with Indian Accounting

Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as

amended).

2. Principles of consolidation

The Audited Consolidated Financial Statements of the Company and its subsidiaries have been

consolidated on a line-by-line basis by adding together the book values of like items of assets, liabilities,

income and expenses, after eliminating intra-group balances and intra-group transactions resulting in

unrealised profits as per Ind As 110 “Consolidated Financial Statements” specified under Section 133 of

the Companies Act, 2013 read with Companies (Accounts) Rules, 2015.

Investment and share of profit of associate and Joint Venture have been consolidated as per the equity

78

method as per Ind AS 28 – “Investments in Associates” and “Ind AS 111 Joint Arrangements” respectively

specified under Section 133 of the Companies Act, 2013 read with Companies (Accounts) Rules 2015.

For the purposes of presenting the consolidated financial statements, the assets and liabilities of Group’s

foreign operations, are translated to the Indian Rupees at exchange rates at the end of each reporting period.

The income and expenses of such foreign operations are translated at the average exchange rates for the

period. Resulting foreign currency differences are recognised as Foreign Currency Translation Reserve

through other comprehensive income.

The Group accounts for its share of post-acquisition changes in net assets of associates, after eliminating

unrealised profits resulting from transactions between the Group and its associates to the extent of its share,

through its Consolidated Statement of Profit and Loss and Other Comprehensive Income, if any, to the

extent such change is attributable to the associates’ Statement of Profit and Loss and through its reserves,

if any, for the balance.

Change in Ownership interest

Changes in the Group’s ownership interest in subsidiaries that do not result in the group losing control over

the subsidiaries are accounted for as equity transactions.

3. Basis of preparation of financial statements

Our Audited Consolidated Financial Statements have been prepared in accordance with Indian Accounting

Standards (Ind AS) as prescribed under Section 133 of the Act to be read with Rule 3 of the Companies

(Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment

Rules, 2016. These comprises of the Balance Sheet, Statement of Profit and Loss, Cash Flow Statement,

Statement of Changes in Equity and the Notes to Financial Statements. We have consistently applied

accounting policies to all periods presented in these Financial Statements.

4. Basis of measurement

The Audited Consolidated Financial Statements have been prepared on a historical cost convention on the

accrual basis, except for certain financial instruments that are measured at fair value, viz derivatives,

employee benefit plan assets. Functional and Presentation Currency the financial statements are presented

in Indian rupees, which is the functional currency of the Company.

5. Significant accounting judgments, estimates and assumptions

The preparation of financial statements requires the management to make judgements, estimates and

assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the

accompanying disclosures, and the disclosure of contingent liabilities. Actual results may differ from these

estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these

estimates and assumptions will generally be reflected in the financial statements in current period or

prospectively, unless they are required to be treated retrospectively under relevant accounting standards. In

particular, information about significant areas of estimates and judgements in applying accounting policies

that have the most significant effect on the amounts recognised in the financial statements includes financial

instruments, useful lives of property, plant and equipment and intangible assets, valuation of inventories,

measurement of defined benefit obligations and actuarial assumptions, provisions and other accruals, sales

returns, chargebacks, allowances and discounts, recoverability/recognition of deferred tax assets,

Assessment of functional currency, Contingencies.

6. Property, plant and equipment (PPE)

Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated

impairment losses, if any. Cost comprises of the purchase price net of eligible input tax credit, and any

attributable cost of bringing the assets to its working condition for its intended use, including the cost of

replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met.

The cost and related accumulated depreciation are eliminated from the financial statements upon sale or

retirement of the asset and the resultant gains or losses are recognized in the statement of profit and loss.

Assets to be disposed are reported at the lower of the carrying value or the net realisable value less cost to

sell. We have adopted, “Cost Model” for accounting for our Property Plant and Equipment.

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7. Capital work-in-progress

Projects under construction wherein assets are not ready for use in the manner as intended by the

management are shown as Capital Work-In-Progress.

8. Intangible assets

Intangible assets are stated at cost less provisions for amortisation and impairments. Software licenses fees

are charged to statement of profit and loss when incurred.

9. Intangible assets under development

Intangible assets consisting of development expenditure of certain products are amortised on straight line

method from the date they are available for use, over the useful life of the assets (5-20 years), as estimated

by the Management.

10. Impairment of assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment,

if any indication of impairment exists. If the carrying amount of the assets exceed the estimated recoverable

amount, an impairment loss is recognised for such excess amount. The impairment loss is recognised as an

expense in the Statement of Profit and Loss.

11. Borrowing cost

Borrowing costs attributable to the acquisition and/or construction of an asset that necessarily takes a

substantial period of time to get ready for use in the manner as intended by management, are capitalised as

part of the cost of the asset. All other borrowing costs are expensed in the period in which they are incurred.

12. Inventories

Inventories consist of Raw Materials, Stores and Spares, Packing Materials, Work-in-Progress, Goods in

Transit and Finished Goods and are measured at the lower of cost and net realisable value. Cost includes

expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred

in bringing them to their existing location and condition. In the case of Finished Goods and Work-in-

Progress, cost includes an appropriate share of overheads based on normal operating capacity. Net

realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of

completion and selling expenses.

13. Trade receivables

Trade receivables are carried at original invoice amount less any provisions for doubtful debts. Provisions

are made where there is evidence of a risk of non-payment, taking into account ageing, previous experience

and general economic conditions. When a trade receivable is determined to be uncollectable it is written

off, firstly against any provision available and then to the Statement of Profit and Loss.

14. Financial instruments

We recognize financial assets and financial liabilities when it becomes a party to the contractual provisions

of the instrument.

(a) Financial Assets

(i) Initial recognition and measurement

We recognize financial assets when it becomes a party to the contractual provisions of the

instrument. All financial assets are recognized at fair value on initial recognition, except for

trade receivables which are initially measured at transaction price. Transaction costs that are

directly attributable to the acquisition of financial assets that are not at fair value through

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profit or loss are added to the fair value on initial recognition. Regular way trade of financial

assets are accounted for at trade date.

(ii) Subsequent measurement

For the purpose of subsequent measurement, financial assets are classified in four categories:

• Financial assets at amortised cost:

A financial asset is subsequently measured at amortised cost, if it is held within a

business model whose objective is to hold the asset in order to collect contractual cash

flows and the contractual terms of the financial asset give rise on specified dates to

cash flows that are solely payments of principal and interest on the principal amount

outstanding. After initial measurement, debt instruments are subsequently measured at

amortised cost using the effective interest rate method, less impairment, if any.

• Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive

income if it is held within a business model whose objective is achieved by both

collecting contractual cash flows and selling financial assets and the contractual terms

of the financial asset give rise on specified dates to cash flows that are solely payments

of principal and interest on the principal amount outstanding. The Company has made

an irrevocable election for its investments which are classified as equity instruments

to present the subsequent changes in fair value in other comprehensive income based

on its business model.

• Financial assets at fair value through profit or loss

Financial assets which are not classified in any of the above categories are

subsequently fair valued through profit or loss.

• De-recognition:

Our company derecognizes a financial asset when the contractual rights to the cash

flows from the financial asset expire or it transfers the financial asset and the transfer

qualifies for de-recognition under Ind. AS 109.

• Investments in subsidiaries and associates

Our Company has elected to recognise its investments in subsidiaries and associates at

cost in the separate financial statements in accordance with the option available in Ind

AS 27, ‘Separate Financial Statements’.

(b) Financial Liabilities

(i) Initial recognition and measurement

Our Company’s financial liabilities include trade and other payables, loans and borrowings

including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Financial liabilities are classified, at initial recognition, at fair value through profit and loss

or as those measured at amortised cost.

(ii) Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification as follows:

• Financial liabilities at fair value through profit and loss

Financial liabilities at fair value through profit and loss include financial liabilities held

for trading. The Company has not designated any financial liabilities upon initial

recognition at fair value through profit and loss.

• Financial liabilities measured at amortised cost

After initial recognition, interest bearing loans and borrowings are subsequently

measured at amortised cost using the effective interest rate method except for those

designated in an effective hedging relationship.

• De-recognition

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A financial liability (or a part of a financial liability) is derecognized from the company’s

balance sheet when the obligation specified in the contract is discharged or cancelled or

expires.

(c) Derivative Financial Instruments

Our company holds derivative financial instruments such as foreign exchange forward and option

contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The

counter party for these contracts is generally a bank and these are not designated as hedges under

Ind AS 109, Financial Instruments. Any derivative that is either not designated as hedge, or is so

designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial

liability, at fair value through profit or loss. Derivatives not designated as hedges are recognized

initially at fair value and attributable transaction costs are recognized in the statement of profit and

loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value

through profit or loss. Assets/liabilities in this category are presented as current assets/current

liabilities if they are either held for trading or are expected to be realized within 12 months after the

balance sheet date.

15. Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits

with an original maturity of three months or less, which are subject to an insignificant risk of changes in

value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-

term deposits, as defined above.

16. Operating cycle

Based on the nature of products / activities of our Company and the normal time between acquisition of

assets and their realisation in cash or cash equivalents, our Company has determined its operating cycle as

12 months for the purpose of classification of its assets and liabilities as current and non-current.

17. Revenue Recognition

Revenue from contracts with customers is recognised on satisfaction of performance obligation, when

control of the goods is passed to customer, at an amount that reflect the consideration our company expects

to receive. The point at which control passes is determined based on terms of agreement with customer or

as per general industry / market practice. Estimated future returns are calculated based on specific

methodology and assumptions. The methodology and assumptions used to estimate returns are monitored

and adjusted regularly in the light of contractual and legal obligations, past trend & experience and

projected market conditions. Revenue is recognised net of such future expected return and actual return.

Variable consideration arises on the sale of goods as a result of profit sharing arrangement and various

deductions including charge back. Revenue recognition in case of profit sharing is highly uncertain hence

the same is recognised based on reasonable certainty of revenue. Our company enters into development

and marketing collaborations and out-licences of our company’s compounds or products to other parties.

These contracts give rise to fixed and variable consideration from upfront payments, development

milestones, sales-based profit sharing and royalties. Income dependent on the achievement of milestone is

recognised when the related event occurs and it is highly probable that significant reversal in the amount

of cumulative revenue recognised will not occur. Sales-based royalties on a licence of intellectual property

are recognised on confirmation of actual sales. GST and other taxes on sales are excluded from revenue.

Income from operations includes Export benefits available under prevalent schemes are recognised to the

extent considered receivable. Other income is comprised of interest income, Gain / loss on investments,

dividend income and Insurance claim. Dividend income and other income is recognized when the right to

receive payment is established.

18. Research and Development Expense

All revenue expenses related to research and development including expenses in relation to development

of product/processes and expenses incurred in relation to compliances with international regulatory

authorities in obtaining of Abbreviated New Drug Applications (ANDA) and Drug Master Files (DMF)

are charged to the statement of profit and loss in the year in which it is incurred.

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Development expenditure of certain nature is capitalised when the criteria for recognising an intangible

asset are met, usually when a regulatory filing is intended to be made in a major market and approval is

considered highly probable.

19. Employee benefits

(a) Defined Benefit Obligation Plans:

(i) Gratuity Defined Benefit Obligation Plans:

Our Company operates a defined benefit gratuity plan which requires contributions to be made

to a separately administered fund by the Life Insurance Corporation of India (LIC) and HDFC

Life Insurance Company Ltd. The cost of providing benefits under the defined benefit plan is

determined using the projected unit credit method. The service cost and the net interest cost are

charged to the Statement of Profit and Loss. Actuarial gains and losses arise due to difference

in the actual experience and the assumed parameters and also due to changes in the assumptions

used for valuation. The Company recognizes these re-measurements in the Other

Comprehensive Income (OCI).

(ii) Provident Fund

Our Company’s contribution to provident fund, administered through a Company managed

trust, is recognised as an expense in the Statement of Profit and Loss.

(b) Defined Contribution plans

Superannuation fund is administered by the HDFC Life Insurance Company Ltd. The contribution

to superannuation fund, Contribution to pension fund, ESIC, EDLI and Labour Welfare Fund are

recognised as an expense in the statement of profit and loss. Under defined contribution plans

Provident Fund, is contributed to Government administrated Provident Fund by subsidiaries.

(c) Leave Liability

Our Company has a policy to allow accumulation of leave by employees up to certain days.

Accumulated leave liability as at the yearend is provided as per actuarial valuation. The cost of

providing benefits under the defined benefit plan is determined using the projected unit credit

method. Actuarial gains and losses arise due to difference in the actual experience and the assumed

parameters and also due to changes in the assumptions used for valuation. Our Company recognizes

these actuarial gains and losses in the statement of Profit and Loss, as income or expense.

20. Depreciation / Amortisation

Depreciation is calculated on a straight-line basis as per the specified life of the assets as provided in

schedule II to the Companies Act, 2013.

Class of Assets- Tangible Range of useful life

Building 05 - 60 Years

Plant & Equipment 03 - 22 Years

Furniture & Fixtures 10 Years

Vehicles 08 - 10 Years

Office Equipment 05 Years

Class of Assets- Intangible Range of useful life

Goodwill 10 Years

Other Intangible Asset 08 Years

The management, based on internal technical evaluation, believes that the useful lives as given above

best represent the period over which the assets are expected to be used. The useful lives for certain assets

is different From the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013,

and the same is considered in the above range of useful life. Leasehold Land is amortized over the period

of lease. Depreciation methods, useful lives and residual values are reviewed periodically, including at

each financial year end. Depreciation on PPE added during the year is provided on pro rata basis from

the month of addition. Depreciation on sale / disposal of PPE is provided pro-rata up to the preceding

month of disposal/discarding.

83

Impairment

At each balance sheet date, our Company reviews the carrying values of its property, plant and equipment

and intangible assets to determine whether there is any indication that the carrying value of those assets

may not be recoverable through continuing use. If any such indication exists, the recoverable amount of

the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does

not generate cash flows that are independent from other assets, our Company estimates the recoverable

amount of the cash generating unit to which the asset belongs. Recoverable amount is the higher of fair

value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are

discounted to their present value using a pretax discount rate that reflects current market assessments of

the time value of money and the risks specific to the asset for which the estimates of future cash flows

have not been adjusted. An impairment loss is recognised in the statement of profit and loss as and when

the carrying value of an asset exceeds its recoverable amount. Where an impairment loss subsequently

reverses, the carrying value of the asset (or cash generating unit) is increased to the revised estimate of

its recoverable amount so that the increased carrying value does not exceed the carrying value that would

have been determined had no impairment loss been recognised for the asset (or cash generating unit) in

prior years. A reversal of an impairment loss is recognised in the statement of profit and loss immediately

21. Leases

As lessee

Initial measurement

Lease Liability: At the commencement date, a Company measure the lease liability at the present value of

the lease payments that are not paid at that date. The lease payments shall be discounted using incremental

borrowing rate. Right-of-use assets: initially recognised at cost, which comprises the initial amount of the

lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus

any initial direct costs less any lease incentives.

Subsequent measurement

Lease Liability: Company measure the lease liability by (a) increasing the carrying amount to reflect

interest on the lease liability; (b) reducing the carrying amount to reflect the lease payments made; and (c)

re-measuring the carrying amount to reflect any reassessment or lease modifications. Right-of-use assets:

subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets

are depreciated from the commencement date on a straight line basis over the shorter of the lease term and

useful life of the under lying asset.

Impairment:

Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate

that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable

amount (i.e. the higher of the fair value less cost to sell and the value in-use) is determined on an individual

asset basis unless the asset does not generate cash flows that are largely independent of those from other

assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which

the asset belongs.

Short term Lease

Short term lease is that, at the commencement date, has a lease term of 12 months or less. A lease that

contains a purchase option is not a short-term lease. If the company elected to apply short term lease, the

lessee shall recognise the lease payments associated with those leases as an expense on either a straight-

line basis over the lease term or another systematic basis. The lessee shall apply another systematic basis

if that basis is more representative of the pattern of the lessee’s benefit.

As a lessor

Leases for which the company is a lessor is classified as a finance or operating lease. Whenever the terms

of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is

classified as a finance lease. All other leases are classified as operating leases. Lease income is recognised

in the statement of profit and loss on straight line basis over the lease term.

22. Foreign Exchange Transactions

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Transactions in foreign currencies are initially recorded by our Company at the rate of exchange prevailing

on the date of the transaction. Monetary assets and monetary liabilities denominated in foreign currencies

remaining unsettled at the end of the year are converted at the exchange rate prevailing on the reporting

date. Differences arising on settlement or conversion of monetary items are recognised in statement of

profit and loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are

recorded using the exchange rates at the date of the transaction. In respect of forward cover contracts, the

mark to market loss / gain as at the reporting date is charged to Statement of Profit and Loss. In respect of

options contracts to mitigate the probable foreign exchange fluctuation risk, the options contracts are fair

valued and the resultant variation as at the reporting date is charged to Statement of Profit and Loss.

23. Taxes

(a) Current income tax

Income tax expense is recognised in the statement of profit and loss except to the extent that it relates

to items recognised in Other Comprehensive Income (OCI) or directly in equity, in such case it is

recognised in OCI or directly in equity respectively. Current income tax for current and prior periods

is recognized at the amount expected to be paid to or recovered from the tax authorities, using the

tax rates and tax laws that have been enacted or substantively enacted on the reporting date. Our

company offsets current tax assets and current tax liabilities, where it has a legally enforceable right

to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the

asset and settle the liability simultaneously.

(b) Deferred tax

Deferred income tax assets and liabilities are recognized for all temporary differences arising

between the tax bases of assets and liabilities and their carrying amounts in the financial

statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent

that it is no longer probable that the related tax benefit will be realized. The benefit of credit

against the payment made towards Minimum Alternate Tax for the earlier years is available in

accordance with the provisions of the section 115J (AA) of income tax act 1961 over the period

of subsequent 15 assessment year and it is recognised to the extent of deferred tax liability in view

of the certainty involved of its realisation against reversal of deferred tax liability.

24. Provisions, Contingent Liabilities and Contingent Assets

(a) Provisions

Provisions are recognised when our Company has a present obligation (legal or constructive) as a

result of a past event, it is probable that an outflow of resources embodying economic benefits

will be required to settle the obligation and a reliable estimate can be made of the amount of the

obligation. The expense relating to a provision is recognised in the statement of profit and loss or

balance sheet as the case may be.

(b) Contingent Liabilities

Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by the

future events not wholly within the control of our company or (ii) Present obligations arising from

past events where it is not probable that an outflow of resources will be required to settle the

obligation or a reliable estimate of the amount of the obligation cannot be made.

(c) Contingent Assets

Contingent Assets are not recognised in the financial statements. Contingent Assets if any, are

disclosed in the notes to the financial statements.

25. Earnings per share

Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of

the company by the weighted average number of equity shares outstanding during the period. Diluted

earnings per equity share is computed by dividing the net profit attributable to the equity holders of the

company by the weighted average number of equity shares considered for deriving basic earnings per equity

share and also the weighted average number of equity shares that could have been issued upon conversion

of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds

85

receivable had the equity shares been actually issued at fair value (i.e. the average market value of the

outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of

the period, unless issued at a later date. Dilutive potential equity shares are determined independently for

each period presented. The number of equity shares and potentially dilutive equity shares are adjusted

retrospectively for all periods presented for any share splits and bonus shares issues including for changes

effected prior to the approval of the financial statements by the Board of Directors.

26. Government Grant

Government grants are recognised when there is reasonable assurance that the grant will be received and

the company will comply with conditions attached to the grant. Accordingly, Government grants is

deducted to calculate the carrying amount of the asset, and is recognised in profit or loss over the life of a

depreciable asset as a reduced depreciation expense. Government grant related to specific expenses are

shown as other income in the Statement of Profit and Loss.

Results of Operations

The table below sets forth a summary of our financial results containing significant items of our income and

expenditure for Fiscal 2020, 2019 and 2018.

(₹ in Crores)

Particulars

Fiscal 2020 Fiscal 2019 Fiscal 2018

Amount % of Total

Income Amount

% of Total

Income Amount

% of Total

Income

Revenue from Operations 4,605.75 99.89 3,934.68 99.76 3,130.81 99.78

Other Income 4.94 0.11 9.38 0.24 7.03 0.22

Total Income 4,610.69 100.00 3,944.06 100.00 3,137.84 100.00

Cost of Materials

Consumed

979.05 21.23 850.04 21.55 725.75 23.13

Purchase of Stock-in

trade

270.93 5.88 234.93 5.96 201.87 6.43

Changes in Inventories (210.59) (4.57) (92.27) (2.34) (42.06) (1.34)

Employee Benefit

Expenses

906.44 19.66 746.69 18.93 622.81 19.85

Finance Cost 27.16 0.59 18.41 0.47 3.40 0.11

Depreciation and

Amortisation

157.32 3.41 115.23 2.92 105.46 3.36

Other Expenses 1,436.89 31.16 1,321.71 33.51 979.34 31.21

Total Expenses 3,567.22 77.37 3,194.74 81.00 2,596.57 82.75

Profit/ (loss) Before

exceptional items and

Tax

1,043.47 22.63 749.32 19.00 541.27 17.25

Exceptional Item 43.65 0.95 - - - -

Profit Before Tax 999.82 21.69 749.32 19.00 541.27 17.25

Tax Expenses

Current Tax 204.57 4.44 178.14 4.52 123.61 3.94

Deferred Tax (4.30) (0.09) (17.29) (0.44) (2.16) (0.08)

Short/ Excess Tax

Provision

(1.09) (0.02) (4.10) (0.10) (1.10) (0.03)

Profit after Tax before

share of Profit of

Associate and Joint

Venture

800.64 17.37 592.57 15.02 420.91 13.41

Share of Profit/ (loss) of

associate and joint

venture

0.05 - (9.28) (0.24) (8.09) (0.26)

Profit/(Loss) for the

year before non-

controlling interest

800.70 17.37 583.29 14.79 412.82 13.16

Non-controlling Interest 28.12 0.61 1.08 0.03 (0.19) (0.01)

Profit for the Year

(attributable to Owners) 828.82 17.98 584.37 14.82 412.63 13.15

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Particulars

Fiscal 2020 Fiscal 2019 Fiscal 2018

Amount % of Total

Income Amount

% of Total

Income Amount

% of Total

Income

Other Comprehensive

Income (1.82) (0.04) 5.83 0.15 (3.20) (0.10)

Total Comprehensive

Income for the year 798.88 17.33 589.12 14.94 409.63 13.05

Total Comprehensive

Income for the year

Attributable to

Non- Controlling interest (28.17) (0.61) (1.09) (0.03) 0.19 0.01

Owners of the Company 827.05 17.94 590.21 14.96 409.43 13.05

Results for Fiscal 2020 compared with Fiscal 2019

Total Income

Our total income increased by 16.90% from ₹ 3,944.06 Crores in Fiscal 2019 to ₹ 4,610.69 Crores in Fiscal 2020.

This is due to the factors mentioned below:

Revenue from Operations: Our revenue from operations increased by 17.06% from ₹ 3,934.68 Crores in Fiscal

2019 to ₹ 4,605.75 Crores in Fiscal 2020. This increase was mainly due to an increase in the export sales of our

products.

Other Income: Our other income decreased by 47.33% to ₹ 4.94 Crores in Fiscal 2020 from ₹ 9.38 Crores in

Fiscal 2019. This decrease was primarily due to decrease in dividend and interest income.

Total Expenses

Our total expenses increased by 11.66% from ₹ 3,194.74 crores in Fiscal 2019 to ₹ 3,567.22 Crores in Fiscal

2020. This is due to the factors mentioned below:

Cost of materials consumed: Cost of materials consumed increased by 15.18% from ₹ 850.04 Crores in Fiscal

2019 to ₹ 979.05 Crores in Fiscal 2020. This increase was primarily due to an increase in sales.

Purchase of Stock-in trade: Purchase of stock in trade increased by 15.32% from ₹ 234.93 Crores in Fiscal 2019

to ₹ 270.93 Crores in Fiscal 2020. This increase was primarily due to an increase in sales.

Changes in Inventories: Our changes in inventories of finished goods, stock-in trade and work-in-progress

changed by 128.23% to ₹ (210.59) Crores in Fiscal 2020 from ₹ (92.27) Crores in Fiscal 2019. This was primarily

due to higher level of closing stock of finished goods at end of Fiscal 2020 compared to Fiscal 2019.

Employee Benefit Expenses: Our Employee Benefit expenses increased by 21.39% from ₹ 746.69 Crores in Fiscal

2019 to ₹ 906.44 Crores in Fiscal 2020. This increase is mainly due to increase in number of employees and

accordingly increase in salaries and wages and contribution to provident and other funds.

Finance Cost: Our Finance Cost increased by 47.53% from ₹ 18.41 Crores in Fiscal 2019 to ₹ 27.16 Crores in

Fiscal 2020. This was primarily due to the utilization of working capital loan taken by our Company during the

Fiscal 2020.

Depreciation and Amortisation: Our depreciation and amortisation expenses increased by 36.53% to ₹ 157.32

Crores in Fiscal 2020 from ₹ 115.23 Crores in Fiscal 2019. This was due to increase in property, plant and

equipment. Our Property, plant and Equipment & right to use assets increased to ₹ 1,524.90 Crores in Fiscal 2020

from ₹ 1,098.41 Crores in Fiscal 2019. Further, increase in amortisation expenses was due to additions in the

intangible assets in the Fiscal 2020.

Other Expenses: Our other expenses increased by 8.71% from ₹ 1,321.71 Crores in Fiscal 2019 to ₹ 1,436.89

Crores in Fiscal 2020. This was primarily due to increase in certain expenses like consumption of stores, spares,

laboratory material and Analytical Expense; power and fuel; freight and forwarding charges; legal & professional

fees and external research & development.

Total tax Expenses: Our total tax expenses increased by 27.07% to ₹ 199.18 Crores in Fiscal 2020 from ₹ 156.75

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Crores in Fiscal 2019. This was due to our higher profit. Our current tax increased to ₹ 204.57 Crores in Fiscal

2020 from ₹ 178.14 Crores in Fiscal 2019.

Profit for the year: Due to the above mentioned factors, our profit for the year increased by ₹ 217.41 Crores or

37.27%, from ₹ 583.29 Crores in Fiscal 2019 to ₹ 800.70 Crores in Fiscal 2020.

Profit for the year attributable to owners: Our profit attributable to owners increased by 41.83%. We recorded

the profit attributable to the owners of our Company ₹ 828.82 Crores in Fiscal 2020 compared to ₹ 584.37 Crores

in Fiscal 2019.

Total Comprehensive Income for the Year: The total comprehensive income for the year which comprises of

profit and other comprehensive income for the year was ₹ 798.88 Crores in Fiscal 2020 compared to ₹ 589.12

Crores in Fiscal 2019.

Results for Fiscal 2019 compared with Fiscal 2018

Total Income

Our total income increased by 25.69% to ₹ 3,944.06 Crores in Fiscal 2019 from ₹ 3,137.84 Crores in Fiscal 2018.

This is due to the factors mentioned below:

Revenue from Operations: Our revenue from operations increased by 25.68% to ₹ 3,934.68 Crores in Fiscal 2019

from ₹ 3,130.81 Crores in Fiscal 2018. This increase was mainly due to an increase in the export sale of our

products and royalty income.

Other Income: Our other income increased by 33.43% from ₹ 7.03 Crores in Fiscal 2018 to ₹ 9.38 Crores in

Fiscal 2019. This increase was primarily due to increase in dividend income, insurance claims, profits on

temporary investments and interest income.

Total Expenses

Our total expenses increased by 23.04% to ₹ 3,194.74 crores in Fiscal 2019 from ₹ 2,596.57 Crores in Fiscal

2018. This is due to the factors mentioned below:

Cost of materials consumed: Cost of materials consumed increased by 17.13% to ₹ 850.04 Crores in Fiscal 2019

from ₹ 725.75 Crores in Fiscal 2018.

Purchase of Stock-in trade: Purchase of stock in trade increased by 16.38% to ₹ 234.93 Crores in Fiscal 2019

from ₹ 201.87 Crores in Fiscal 2018. This increase was primarily due to an increase in sales volume.

Changes in Inventories: Our changes in inventories of finished goods, stock-in trade and work-in-progress

changed by 119.38% from ₹ (42.06) Crores in Fiscal 2018 to ₹ (92.27) Crores in Fiscal 2019. This was primarily

due to higher level of closing stock at end of Fiscal 2019 compared to Fiscal 2018.

Employee Benefit Expenses: Our Employee Benefit expenses increased by 19.89% to ₹ 746.69 Crores in Fiscal

2019 from ₹ 622.81 Crores in Fiscal 2018. This increase was mainly due to increase in number of employees and

increase in their salaries and wages and accordingly, increase in contribution to provident and other funds. Also,

staff welfare expenses increased from ₹ 13.77 Crores in Fiscal 2018 to ₹ 20.6 Crores in Fiscal 2019.

Finance Cost: Our Finance Cost increased by 441.47% to ₹ 18.41 Crores in Fiscal 2019 from ₹ 3.40 Crores in

Fiscal 2018. This was primarily due to the higher utilization of working capital loan during the year.

Depreciation and Amortisation: Our depreciation and amortisation expenses increased by 9.26% to ₹ 115.23

Crores in Fiscal 2019 from ₹ 105.46 Crores in Fiscal 2018. This was due to increase in property, plant and

equipment. Our Property, plant and Equipment increased from ₹ 927.02 Crores in Fiscal 2018 to ₹ 1,098.41

Crores in Fiscal 2019.

Other Expenses: Our other expenses increased by 34.96% to ₹ 1,321.71 Crores in Fiscal 2019 from ₹ 979.34

Crores in Fiscal 2018. This was primarily due to increase in certain other expenses like consumption of stores,

spares, laboratory material and analytical expense; power and fuel; freight and forwarding charges; legal &

professional fees; publicity expenses, service fees and commission; rates and taxes; repairs and maintenance;

88

travelling expenses and Expenses on CSR activities. Also, there was increase in bad debts written-off from ₹ 0.07

Crores in Fiscal 2018 to ₹ 16.53 Crores in Fiscal 2019.

Total tax Expenses: Our total tax expenses increased by 30.25% from ₹ 120.35 Crores in Fiscal 2018 to ₹ 156.75

Crores in Fiscal 2019. This was due to our higher profit. Our current tax increased from ₹ 123.61 Crores in Fiscal

2018 to ₹ 178.14 Crores in Fiscal 2019.

Profit for the year: Due to the above mentioned factors, our profit for the year increased by ₹ 170.47 Crores or

41.29%, from ₹ 412.82 Crores in Fiscal 2018 to ₹ 583.29 Crores in Fiscal 2019.

Profit for the year attributable to owners: Our profit attributable to owners increased by 41.62%. We recorded

the profit attributable to the owners of our Company ₹ 584.37 Crores in Fiscal 2019 compared to ₹ 412.63 Crores

in Fiscal 2018.

Total Comprehensive Income for the Year: The total comprehensive income for the year which comprises of

profit and other comprehensive income for the year was ₹ 589.12 Crores in Fiscal 2019 compared to ₹ 409.63

Crores in Fiscal 2018.

Liquidity and Capital Resources

Historically, we have been able to finance our working capital and other requirements through cash generated

from our operations, bank loans and facilities and issuance of non-convertible debentures and commercial papers.

We have relied on cash from internal resources and loans from banks and financial institutions to finance the

expansion of our business and operations. From time to time, we may continue to obtain loan facilities to finance

our working capital requirements.

Cash Flows

The following table sets forth our cash flows for Fiscal 2020, Fiscal 2019 and Fiscal 2018.

(₹ in crores)

Particulars Fiscal 2020 Fiscal 2019 Fiscal 2018

Net Cash Flow inflow from Operating Activities 449.13 811.96 312.42

Net Cash Flow inflow/ (outflow) from Investing Activities (731.63) (755.60) (884.38)

Net Cash Flow inflow/ (outflow) from Financing Activities 154.85 59.04 502.63

Net Increase/(Decrease) in Cash and Cash Equivalents (127.64) 115.40 (69.34)

Cash and Cash Equivalents at the beginning of the year 199.07 83.74 153.08

Cash and Cash Equivalents at the end of the year 71.84 199.07 83.74

Operating Activities

Our net cash flow from operating activities was ₹ 449.13 Crores in Fiscal 2020. Our operating profit before

working capital changes was ₹ 1,278.09 Crores in Fiscal 2020, which was primarily adjusted by increase in trade

receivables of ₹ 358.26 Crores and increase in inventories of ₹ 220.27 Crores. Also, the direct taxes paid (net of

refund) were ₹ 236.11 Crores.

Our net cash flow from operating activities was ₹ 811.96 Crores in Fiscal 2019. Our operating profit before

working capital changes was ₹ 866.88 Crores in Fiscal 2019, which was primarily adjusted by increase in other

liabilities of ₹ 177.09 Crores, decrease in other assets of ₹ 175.13 Crores and increase in inventories of ₹ 233.33

Crores. Also, the direct taxes paid (net of refund) were ₹ 166.48 Crores.

Our net cash flow from operating activities was ₹ 312.42 Crores in Fiscal 2018. Our operating profit before

working capital changes was ₹ 628.39 Crores in Fiscal 2018, which was primarily adjusted by increase in trade

receivables of ₹ 184.18 Crores, increase in other assets of ₹ 217.64 Crores and increase in trade payables of ₹

258.84 Crores. Also, the direct taxes paid (net of refund) were ₹ 135.11 Crores.

Investing Activities

Net cash flow used in investing activities was ₹ 731.63 Crores in Fiscal 2020. This was primarily on account of

purchase of property, plant and equipment, intangible assets and capital Advance of ₹672.65 Crores.

89

Net cash flow used in investing activities was ₹ 755.60 Crores in Fiscal 2019. This was primarily on account of

purchase of property, plant and equipment, intangible assets and Capital Advance of ₹653.93 Crores.

Net cash flow used in investing activities was ₹ 884.38 Crores in Fiscal 2018. This was primarily on account of

purchase of property, plant and equipment, intangible assets and Capital Advance of ₹749.36 Crores.

Financing Activities

Net cash flow from financing activities in Fiscal 2020 was ₹154.85 Crores which primarily consisted of proceeds

from borrowings of ₹378.02 Crores and increase in working capital demand loans of ₹431.37 Crores. This was

partly offset by repayment of borrowings of ₹200.00 Crores, dividends paid of ₹ 325.97 Crores and interest and

other finance costs of ₹111.06 Crores.

Net cash flow from financing activities in Fiscal 2019 was ₹59.04 Crores which primarily consisted of proceeds

from borrowings of ₹603.70 Crores and increase in working capital demand loans of ₹221.35 Crores. This was

partly offset by repayment of borrowings of ₹604.39 Crores and dividends paid of ₹ 90.91 Crores.

Net cash flow from financing activities in Fiscal 2018 was ₹502.63 Crores which primarily consisted of proceeds

from borrowings of ₹619.05 Crores. This was partly offset by dividends paid of ₹ 90.76 Crores.

Interest Coverage Ratio

The Interest Coverage Ratio of our Company for Fiscals 2020, 2019 and 2018 is as mentioned below:

(₹ in crores, except interest coverage ratio) Sr

No. Year Fiscal 2020 Fiscal 2019 Fiscal 2018

Interest Charged to P&L 27.16 18.41 3.40

Add: Interest Capitalised 83.21 60.20 22.61

A Total Interest 110.37 78.61 26.01

Profit Before Tax, Minority interest but after Exceptional

Items

999.82

749.32

541.27

Add: Interest Charged to P&L 27.16 18.41 3.40

B Earnings Before Interest, Tax, Minority Interest but

after Exceptional Items

1,026.98

767.73

544.67

Interest Coverage Ratio = (B/A) times 9.30 9.77 20.94

Borrowings

As on March 31, 2020, the total current and non-current borrowings of our company aggregated to ₹ 1,747.49

Crores, which includes current borrowings of ₹ 860.50 Crores and non-current borrowings of ₹ 886.99 Crores.

Secured Borrowings:

(₹ in Crores)

Particulars As on March 31, 2020

Current

Working Capital Demand Loan 0.04

Total 0.04

Unsecured Borrowings:

(₹ in Crores)

Particulars As on March 31, 2020

Current

Working Capital Demand Loan 310.46

90

Commercial Paper 550.00

Non- current

Term Loan 387.53

Non-convertible Debentures 499.46

Total 1,747.45

In the event, any of our lenders declare an event of default, this could lead to acceleration of our repayment

obligations, termination of one or more of our financing agreements or force us to sell our assets, any of which

could adversely affect our business, results of operations and financial condition.

Off-Balance Sheet Items

We do not have any other off-balance sheet arrangements, derivative instruments or other relationships with any

entity that have been established for the purposes of facilitating off-balance sheet arrangements.

Related Party Transactions

For details in relation to the related party transactions, see "Related Party Transactions" beginning on page 71.

Contingent Liabilities and Commitments

As on March 31, 2020 our contingent liabilities and commitments were as follows:

(₹ in Crores)

Particulars Amount

1. Estimated amount of contracts net of advances remaining to be executed on capital

accounts

269.18

2. Contingent Liabilities

(a) Letters of credit and Guarantees 113.40

(b) Liabilities Disputed in appeals

Excise duty 0.24

Sales Tax 3.43

(c) Claims against the company not acknowledged as debt 0.35

(d) Export obligation against advance license 0.03

(e) Disputed liability in respect of Ministry of Industry, Department of Chemicals and

Petrochemicals in respect of price of Rifampicin allowed in formulations and landed cost

of import

0.35

Total 386.98

Capital Expenditures

In Fiscal 2018, Fiscal 2019 and Fiscal 2020, our capital expenditure was ₹ 922.83 Crores, ₹ 818.27 Crores and ₹

897.48 Crores, respectively. The following table sets forth our capital expenditures for the periods indicated:

(₹ in Crores)

Particulars Fiscal

2020 2019 2018

Tangible Asset 569.72 277.19 239.07

Capital Work in progress 232.70 430.64 541.48

Intangible Asset 32.81 - 69.89

Intangible Asset under Development 62.25 110.44 72.39

Total 897.48 818.27 922.83

The increase in our capital expenditure for tangible assets is primarily on account of plant and equipment,

buildings and R&D Equipment purchased in Fiscal 2018, Fiscal 2019 and Fiscal 2020. While the increase in

capital expenditure for intangible assets under development is primarily on account of development related

91

expenditure of various products including intangible asset received on investment.

Changes in Accounting Policies

Except as disclosed in this Placement Document, there have been no changes in our accounting policies during

Fiscals 2018, 2019 and 2020, except for the changes as necessitated by applicable laws.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to various types of market risks during the normal course of business. Market risk is the risk that

the fair value or future cash flows of a financial instrument will fluctuate on account of changes in market prices.

Market risk comprises of, interest rate risk, foreign Exchange Risk, Credit Risk, liquidity risk, inflation and

commodity price risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate on

account of changes in market interest rates. Interest rates for borrowings have been volatile in India in recent

periods. Our exposure to the risk of changes in market interest rates relates primarily to the long term debt

obligations

Foreign Exchange Risk

Changes in currency exchange rates influence our results of operations. Foreign exchange risk is the risk that the

fair value of future cash flows of financial instruments will fluctuate due to the change in foreign currency

exchange rates. Our foreign exchange risk arises from our foreign operations, foreign currency revenues and

expenses. We have obtained external commercial borrowings We use foreign exchange option contracts, to

mitigate the risk of changes in foreign currency exchange rates in respect of certain business transactions and

recognized assets and liabilities. These foreign currency options contracts are not intended for trading or

speculative purposes but for mitigating currency risk.

Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer

contract, leading to a financial loss. We are subject to the risk that our counterparties under various financial or

customer agreements will not meet their obligations. We are exposed to credit risk from our operating activities

(primarily trade receivables) and from our investing activities including deposits with banks, mutual funds and

other financial instruments.

We extend credit to customers in normal course of business. We consider factors, such as, credit track record in

the market and past dealings for extension of credit to customers. We monitor the payment track record of our

customers Outstanding customer receivables are regularly monitored. In Fiscal 2018, Fiscal 2019, Fiscal 2020

our net trade receivables were ₹ 526.34 crores, ₹ 488.92 crores and ₹ 864.75 crores, respectively.

Liquidity Risk

Liquidity risk is the risk that we may not be able to meet our present and future cash and collateral obligations

without incurring unacceptable losses. Liquidity risk management implies maintaining sufficient cash and

marketable securities and the availability of funding through an adequate amount of credit facilities to meet

obligations when due. We monitor our risk to a shortage of funds, which considers the maturity of both our

financial investments and financial assets (i.e. trade receivables and other financial assets) and projected cash

flows from operations.

Commodity Price Risk

We are exposed to market risk with respect to the prices of raw material and other components used in our

products. The costs for these raw materials and components are subject to fluctuation based on commodity prices.

The cost of raw materials and other components may also fluctuate based on their availability from suppliers. In

the normal course of business, we purchase these raw materials and components pursuant to the mid/ short term

supply agreements.

Inflation

In recent years, India has experienced relatively high rates of inflation. While we believe inflation has not had

any material impact on our business and results of operations, inflation generally impacts the overall economy

and business environment and hence could affect us.

92

Competitive Conditions

We operate in a competitive environment. See sections, “Our Business”, “Industry Overview”, “Risk Factors”

and “Management’s Discussion and Analysis of Financial Condition and Results of Operations –Factors

Affecting our Financial Results - Competition” on pages 106, 93, 35 and 76 respectively.

Reservations, qualifications or adverse remarks of auditors in the last five Fiscals immediately preceding

the year of issue of this Placement Document and their impact on the financial statements and financial

position of our Company and the corrective steps taken and proposed to be taken by our Company for each

of the said reservations or qualifications or adverse remarks

There are no reservations, qualifications, matters of emphasis or adverse remarks of our statutory auditors in their

respective reports on our audited consolidated financial statements and audited standalone financial statements as

at and for the last five Fiscals preceding the date of this Placement Document.

Other than as disclosed in "Material Developments" and elsewhere in this Placement Document, there are no other

material developments which have taken place after March 31, 2020.

93

INDUSTRY OVERVIEW

The information contained in this section is derived from the various publicly available industry reports prepared

by recognised agencies. Neither we, nor any other person connected with the Offer has independently verified this

information. Industry sources and publications generally state that the information contained therein has been

obtained from sources generally believed to be reliable, but their accuracy, completeness and underlying

assumptions are not guaranteed and their reliability cannot be assured. Industry publications are also prepared

based on information as of specific dates and may no longer be current or reflect current trends. For the

information contained in this section, we have also relied substantially on the IQVIA Research Reports. The

IQVIA Research Reports have been prepared on the basis of information as of specific dates which may no longer

be current or reflect current trends, and opinions in the IQVIA Research Reports may be based on estimates,

projections, forecasts and assumptions that may prove to be incorrect. The IQVIA Research Reports are not a

comprehensive evaluation of the industry, the Company or the Equity Shares and all material within the IQVIA

Research Reports should be deemed as expressions of opinion which are subject to change without notice.

Global Pharmaceuticals Market – Size & Growth

As per IQVIA, Global Medicine Spending and Usage Trends - March 2020, Global medicine spending growth is

consistent with the increased global use of medicine and is expected to exceed $1.1 trillion in 2024. Global

spending has steadily increased from 2009–2019 with a 10-year CAGR of 4.2% and spending reaching $955

billion in 2019. This reflects a 23% jump from $777 billion in 2014.

Exhibit *: Global Medicine Net Market Size and Growth 2009, 2014 & 2019 (Constant USD, Bn)

Source: IQVIA, Global Medicine Spending and Usage Trends - March 2020

Developed markets have been slightly steadier, with 2.6% and 3.3% CAGRs in net market size from 2009–2014

and 2014–2019, respectively. However, the developed markets remain biggest contributor to global market size,

comprising of 64% of spending as of 2019 and is expected to comprise 60–61% of spending in 2024. On the other

hand, Pharmerging markets have seen the fastest growth, with a 12.2% CAGR from 2009–2014 and 7.7% CAGR

from 2014–2019. In 2019, Pharmerging markets comprised 26% of global pharmaceuticals spending and is

expected to rise to 28–30% of spending in 2024. However, overall global growth is expected to moderate to 2–

5% through 2024.

Going forward, the developed markets are expected to see an average CAGR between 1–4% through 2024, below

the historical 3.3% CAGR from 2014–2019. In these markets, medicine spending reached $609 billion in 2019,

with a slight increase in five-year CAGRs from 2.6% to 3.3%.

Pharmerging markets are expected to show a strong growth of 5–8% CAGR through 2024, against less than the

7.7% CAGR in the past five years (see Exhibit 4). Most Pharmerging market growth has been driven by access

expansions, leading to greater volume use and adoption of more novel therapies. These include specialty

medicines, which are projected to contribute more to spending than in previous periods. However, most of the

products used in these countries are non-original products, which aids in keeping spending low despite expanding

volume. As a result, projections suggest most countries will have slower growth than historical CAGRs.

455 519 609

95168

244

78

90

102

0

200

400

600

800

1000

1200

2009 2014 2019

Developed Pharmerging Rest of World

94

Factors affecting the Global Healthcare Spending

As per IQVIA, Global Medicine Spending and Usage Trends - March 2020, the observed and projected spending

growth is slowing due to continued effects of pricing controls and increasing brand LOEs, and are offset by

continued high numbers of new medicines. The following factors are described in greater detail below.

New products

New product growth is projected to contribute $165 billion over the next five years, up from $126 billion in the

past five. It also reflects the effects of market access and price controls in many markets that may contribute to

slower growth. The IQVIA Institute estimates approximately 270 (~54 per year) new molecular entities (NMEs)

are expected to be approved between 2020 and 2024, compared to 236 from 2015–2019, and 200 from 2010–

2014, contributing to the rise in new brand spending. From 2015–2019, new brands comprised 4–7% of brand

spending and are expected to consistently comprise 5% from 2020– 2024. New brand spending growth is largely

driven by oncology, autoimmune, other immunology treatments and many other niche and orphan treatments. As

a result, specialty spending is expected to comprise a greater proportion of new brand spending in 2024, reaching

78%, or $130 billion of the projected $165 billion spending in developed markets. New products spending growth

is expected to be offset by declining price growth, particularly in the United States, and older products growing

more slowly. The deceleration of spending growth in the face of rising specialty products and spending indicates

countries and payers are succeeding at controlling price negotiations.

Impact of brand losses of exclusivity (LOE)

Brand LOEs will result in $139 billion less in brand sales at invoice-level in developed markets, an increase in

LOE impact compared with the $107 billion seen in the past five years. The largest losses are projected in 2023,

with an expected $39 billion in losses in this year alone. Significant products contributing to brand LOEs in 2023

include sitagliptin (Januvia), adalimumab (Humira), liraglutide (Victoza), and lisdexamfetamine (Vyvanse) with

combined projected losses of nearly $15 billion. From 2020–2024, these products are predicted to generate losses

of or greater than $2.7 billion each. Importantly, the losses are not calculated at net prices, meaning losses could

be slightly less when accounting for rebates, which are typically discontinued post-expiry. Additionally, some

losses are offset by generic uptake and increased uptake overall, meaning payer savings could be less than the

stated amounts. The timing of expiries and generic entry are particularly volatile and based on litigation and other

factors.

Exhibit *: Developed Markets Lower Brand Invoice Spending Due to Loss of Exclusivity ( Constant USD, Bn)

Source: IQVIA, Global Medicine Spending and Usage Trends - March 2020

Continued emergence of breakthrough therapies

With market dynamics shifting, including the rise in specialty products for smaller patient populations, the

likelihood of breakthrough therapies coming to market that significantly impact patient care or provide a cure will

increase, but are not expected to impact broad patient populations. Breakthrough therapies are not expected to

escalate spending growth, as was observed with the advent of highly effective HCV treatments. In the period of

2014–2015, HCV treatments accounted for $26.5 billion of new brand spending growth, nearly 30% of all new

brand spending growth in developed markets in those two years. This impact on spending trends was

unprecedented, and there is no clear pipeline therapy with similar characteristics expected to be commercially

21.3 22.7 23.6

16.4

22.7 21.8 22.0

30.0

38.9

26.2

0.0

10.0

20.0

30.0

40.0

50.0

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024Total losses per year

95

available in the next five years. While innovative gene therapies will reach the market shortly, the approvals and

subsequent availability are expected to come gradually. As a result, in developed markets, novel payment

infrastructure is already being explored to manage these high-cost therapies, potentially lessening their impact on

spending growth.

Declining Prices on an invoice-basis

As a result of these pressures, growth due to price changes is expected to be lower than historical trends, including

on a net-basis. In the United States, brand prices have been increasing more slowly on an invoice basis over the

past five years, slowing from 13.5% to 5.5%. They are expected to continue slowing, growing by 4–7% through

2024. The higher invoice price increases in earlier years were understood to be the result of several outlier products

with more sizeable price increases on an invoice-basis but offset by larger rebates, and therefore, such increases

are not present on a net-basis. Additionally, net prices in the United States also see slowing growth, from 4.3% in

2014 down to 0.3% in 2018, with growth expected in the range of -1–2% through 2024. The differences between

invoice and net prices in the United States are influenced by a variety of factors, such as negotiated discounts and

rebates, statutory fees and subsidies, and the use of consumer coupons. All of these reduce net prices and

contribute to the lower net trend. Generally, invoice price increases have been offset by greater discounts and

rebates. In other developed countries, dynamics similar to historical periods are expected, with brand invoice

growth projected to be -4 – -1%, or -5–2% on a net-basis. Increasingly negotiated discounts are being employed

alongside direct setting of list prices with governments, resulting in smaller differences between invoice and net,

but a broadly similar dynamic over time. Most developed countries do not allow prices to rise after a product

launches and invoice price declines are typically the result of the government restructuring prices, which are

further reduced on a net-basis by negotiations on specific products.

Exhibit *: Developed Markets Protected Brands Invoice and Net Price Growth

Year United States brand invoice price

growth

United States brand net price growth

(estimated)

2014 13.5% 4.3%

2015 11.2% 1.6%

2016 8.7% 2.9%

2017 7.1% 2.1%

2018 5.5% 0.3%

2019E 4-7% (-1 to -2)%

2020E 4-7% (-1 to -2)%

2021E 4-7% (-1 to -2)%

2022E 4-7% (-1 to -2)%

2023E 4-7% (-1 to -2)%

2024E 4-7% (-1 to -2)%

Source: IQVIA, Global Medicine Spending and Usage Trends - March 2020

United States Pharmaceuticals Market

The United States is the world’s largest pharmaceuticals market with estimated medical spending of USD 510

billion for fiscal year 2019 which is expected to go up to USD 605 – 635 billion (Source: IQVIA, Global Medicine

Spending and Usage Trends - March 2020). Driven by factors such as large healthcare spending, high per-capita

income, and strong research and development investments, the pharmaceutical market in the United States has

witnessed an upward surge over the past few years, growing at a CAGR of 4.3% over 2014 to 2019. Additionally,

the United States represents world’s biggest and most important market for pharmaceuticals and the share of

Generics has increased steadily in the pharmaceutical market, in terms of both revenue and prescriptions.

The United States is characterised by high per capita consumption, with citizen consume large amounts of

medicine and generally prefer branded drugs. Annual per capita spending will rise to USD1,179. Patented drugs

account for the majority of the market (75%), and this will continue to increase marginally over the next 10-year

forecast period, despite the uptake of generic drugs increasing as a cost-containment mechanism. Pharmaceutical

spending as a percentage of GDP is 1.9%, which is well above the global average of 1.5%. of the global GDP.

Despite increased accessibility to healthcare provision in the US, which will occur as a result of the nation's

healthcare reform, the rising financial burden on healthcare insurance providers, the slow growth rates for

consumer spending and the limited scope for market expansion (due to maturity) will lead to constraining the

pharmaceutical sales growth rates in low single-digit figures over the medium-term. However, In the long-term,

96

generic pharmaceuticals market is expected to grow faster than the overall pharmaceuticals market in the US, due

to greater government involvement in state healthcare, likely acceleration of pricing restrictions and insurance

providers activism to bring down the per capita pharmaceutical burden. Implementation of an effective universal

health insurance system will enable drug makers to gain better access to a patient population of as many as 42mn

people without health insurance.

The overall level of generic dispensing of prescription medicines has risen from 75% in 2009 to 90% in 2018 (As

per IQVIA, Medicine Use and Spending in the US report – May 2019). The market accessible to generics,

measured as that part of the market where generics have launched, has risen from 80% of prescriptions to 92%

over ten years.

Exhibit *: Generic (Branded and Unbranded) Market Share, % of Total Rx

Source: IQVIA, Medicine Use and Spending in the US report

Exhibit*: Percent of Market Accessible to Generics, % of Total Rx

Source: IQVIA, Medicine Use and Spending in the US report

Opportunities in the Complex generics space

The U.S. Food and Drug Administration (FDA) defines a generic drug as one that is identical or bioequivalent, to

a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics,

and intended use. A simple generic is a copy of a small molecule reference drug and is chemically identical to its

branded counterpart. A complex generic is a generic that could have a complex active ingredient, complex

formulation, complex route of delivery, or complex drug device combinations.

As per IQVIA (Report titled “Complex Generics – Charting a new path, December 2017”), Generics developers

who can adapt their clinical development to address these added challenges while still achieving speed to market

can benefit from exclusivity and considerable return on investment. While cheaper than branded options, complex

generics offer biopharma companies the opportunity to capture additional value commensurate with the associated

additional risk and patient benefit.

As per IQVIA, Complex Generics – Charting a new path, December 2017, key considerations for pursuing

complex generics include:

Assess regulatory requirements for complex generics development

Simple generics generally have a clear development roadmap which usually includes guidance from the FDA

Office of Generic Drugs (OGD) describing endpoints and data required for U.S. approval. With complex generics,

developers are less likely to find regulatory guidance, which adds uncertainty and risk to the planning and design

process. Having a clear regulatory strategy that leads to product approval is crucial for these projects. To ensure

75%78%

80%

84%86% 87% 88% 89% 90% 90%

70%

75%

80%

85%

90%

95%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

80%83%

85%88% 89% 90% 91% 92% 92% 92%

70%

75%

80%

85%

90%

95%

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

97

they are on the right path, developers should meet with regulators early on to present their development strategy

and review their study design and comparability studies before they move forward. This enables developers to

optimize their program, streamline filings, and avoid surprises during the marketing application assessment

process.

Planning & Study Design

In most cases with complex generics, the plan will require clinical studies beyond what is typical of a simple

generic product, and that should be taken into account from the outset. When planning these trials, the time,

location, and cost of recruiting in a particular region, especially if there is competition for patients and/or site

resources, should be taken into account.

Site Selection

Companies interested in pursuing complex generics should choose partners who can navigate the unique

challenges in finding trial sites that have the expertise, interest, and access to targeted patient populations. In many

cases, the sites most capable of delivering these projects may not be interested in participating in a generics trial,

while those that are interested may lack the experience to manage the additional investigational requirements that

complex generics trials require. To minimize the risk, pharmaceutical companies should look for partners who

have extensive site networks, and the ability and willingness to educate novice site leaders who are interested in

expanding their offerings and taking on more complex projects. Because these support strategies require additional

education, tools, and oversight to these sites, pharmaceutical companies should begin working with their partners

on site outreach strategies early on in the research process.

Compliance

Companies need to carefully evaluate whether they have the equipment, training, knowledge, leadership, and

commitment to follow compliance rules especially in the face of pressure to cut time and cost from the project.

Along with managing the rapid timelines and complex development process, pharmaceutical companies must be

rigorous in their adherence to good manufacturing and compliance planning to avoid regulatory issues that could

delay regulatory approval. Often, the development phase is rushed to expedite regulatory submission, and

manufacturing and QC managers bemoan the fact that R&D staff did not take adequate care in creating,

transferring, and validating analytical methods and manufacturing processes. All of these compromises increase

compliance risks for any development project, but with complex generics projects compliance concerns get more

complicated – especially when working with novice sites and manufacturers, or those that have only worked on

simple generics projects. Complex generics development plans generally require more nuanced methods and

rigorous testing to meet all efficacy, safety, and equivalence goals. They also face increased compliance risks in

the transition process from pilot project to manufacturing where processing issues can impact identity, quality,

purity, potency, and consistency from batch to batch.

Evolution of the United States Generics Markets

As per IQVIA, US Generic Market – Evolution of Indian Players report, February 2019, the use of generics has

increased substantially in the years following passage of the Hatch-Waxman Act for a number of reasons namely;

a) strengthened mechanisms promoting generic use, such as tiered formularies with lower patient co-payments for

generic than for brand-name drugs, and commercial insurance and public coverage plan restrictions limiting

formulary coverage to generics in certain therapeutic categories; and b) state laws allowing generic forms to be

substituted automatically by pharmacists for brand-name drugs prescribed by physicians, so long as physicians

have not specified that the prescription must be ‘‘dispensed as written’’. Attractiveness of the United States

generics market has resulted in a rise in the number of ANDA applications received by the FDA, which has further

undertaken initiatives to ease out the overall approval process. The FDA introduced Generic Drug User Fee

Amendments (GDUFA) to quicken delivery of safe and effective generic drugs to the public, and reduce costs to

the industry. GDUFA was instrumental in improving ANDA approval rates, that have catapulted to ~65 ANDA

approvals/month from ~40 in 2012. With the incoming GDUFA II, the review time for ANDA standard

application is expected to cut down further to 8-10 months.

98

Exhibit *: USFDA – ANDA Approvals & Tentative Approvals

Source: USFDA (Financial Year from October to September)

*FY2019-20 Data up to May, 2020.

The increasing ANDA approvals have resulted in increase in market share of generic drugs among prescriptions

from 72% in 2008 to 90% in 2017, as per IQVIA. This has primarily been driven by the entry of generic players

across therapies and loss of exclusivity of patented products in the past decade. Within the past 5 years, drugs

worth USD 83Bn have gone off-patent with another USD 72Bn worth of small molecule drugs slated to go off-

patent in the next 5 years 2017 onwards.

The increasing number of players filing ANDA applications for similar therapies has resulted in a highly

competitive market with significant price erosion. The price impact of having a greater number of generic drugs

for the same indication is dramatic. As per IQVIA analysis, on average, the first generic competitor prices its

product at ~70%-80% of the brand-name manufacturer. However, the entry of a second generic manufacturer

reduces the average generic price to ~40%-50% of the branded drug price. In recent times, multiple generic players

(5 or more) have been entering at once, thereby resulting in price dips of ~50% of the innovator within the 1st

year of launch. As additional generic manufacturers market the product, the prices continue to fall with average

generic prices dipping to less than 5% of the innovator in products with >10 generic players.

The decline in generic prices was further been augmented by the rising trend in distributor consolidation. About

a decade ago, United States had more than 10 pharmaceutical distributors contributing to ~80% of the United

States generic market. However, the last decade has been witness to consolidation so much that the top 3 players

— WBAD, Red Oak and McKesson OneStop, have contributed to >80% of the United States generics market.

With increasing consolidation in the pharma supply chain, among wholesalers, PBMs, and retail pharmacies, the

bargaining power of these vertically integrated players has improved drastically, leading to pricing pressure on

small and medium sized generic players. Increased bargaining power has resulted in a 4% – 5% discount in

average generic sourcing cost.

Exhibit x: US Generics Market Size (USD Bn)

Source: IQVIA, US Generic Market – Evolution of Indian Players report, February 2019

440 409492

651

763 781

935

467

95 91 120184 174 190

236

113

0

200

400

600

800

1000

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20*ANDA Approvals Tentative Approvals

4758

6876 77

71 69 7379 83 86

0

20

40

60

80

100

2012 2013 2014 2015 2016 2017 2018E 2019E 2020E 2021E 2022E

99

Key Considerations for United States generics business

As per IQVIA, US Generic Market – Evolution of Indian Players report, February 2019, the rising number of

players targeting the United States generics market, a ramp-up in approval rates, consolidation among distributors

(top 3 controlling 90% of the market) in the United States and the falling number of products going off-patent

over the past few years, have driven significant crowding and pricing pressure in the United States generics

market. With affordable healthcare being a key focus area for the United States government, the outlook for

generics prices is expected to remain competitive in the near future. While all generic companies are vulnerable

to pricing pressure, we believe that the smaller sized players and new entrants will be most affected due to their

vanilla portfolios. Few well established pharmaceutical companies have already started pursuing strong growth

trajectories, through diversification to specialty portfolio.

Regulatory Compliance

Adherence to the cGMP (current good manufacturing practices) as per USFDA guidelines, is sacrosanct to prevent

regulatory clampdown on company facilities. India has the highest number of USFDA approved finished dosage

facilities outside the United States. Hence, the relevance of Indian facilities is high in the global context. USFDA

has increased the frequency of its inspections to once or even twice a year, compared to once in two to three years

earlier. The prior intimation time for plant inspection has also been slashed from 25-30 days to as little as 24

hours. Further, the USFDA has intensified scrutiny on drug manufacturing facilities as companies are now being

penalized for lapses such as inappropriate clothing of employees, improper washing conditions and inadequate

lighting, apart from issues relating to data integrity, batch failure investigations or improper quality control

systems. Companies failing to adhere to USFDA guidelines have faced the brunt of not getting timely approvals

in the past.

Time to Market

Given the competition in the generic space, lead time to approval becomes very critical, which in turn is a function

of timing of filing, quality of work done to prove bioequivalence and establishing robust manufacturing processes

that would enable upscaling from lab to commercial level. Submission of complete and satisfactory data can

substantially reduce time of correspondence between ANDA filing company and USFDA, thereby reducing

approval time. Timely approval needs to be backed by timely launch of the product in the market, as delay in

launching of generics post approval has the potential of hampering the benefits that a company can enjoy in the

market.

Portfolio Selection

When aiming for a revenue-rich portfolio, generic finished-dose companies must critically evaluate multiple

criteria like loss of exclusivity, market data, availability of generics, manufacturing requirements and costs,

forecasted competition etc. in order to increase the likelihood of success, and limit the risk of failure.

As per IQVIA, US Generic Market – Evolution of Indian Players report, February 2019, in the past, it has been

observed that large Indian players have only launched 75-80%of approved ANDAs. Wasted costs and time

associated with product failures result in huge financial loss – typical cost of ANDA development for Indian

players vary from INR 3-5 cr depending on the type of formulation (simple generic vs. complex generic). This

demonstrates how product identification is one of the most crucial strategic consideration for generic finished-

dose companies

Overview of the United States Regulations on Drug approvals

The food and drug administration (USFDA) within the U.S. Department of Health and Human Services regulates

the drug approval system in United States. The main consumer watchdog in this system is FDA’s Center for Drug

Evaluation and Research (CDER).

Process of ANDA filing with USFDA

ANDA contains data submitted to FDA's Center for Drug Evaluation and Research, Office of Generic Drugs, for

review and ultimate approval of a generic drug product. Once ANDA is approved, an applicant may manufacture

and market the generic drug product to provide a safe, effective, low cost alternative to the public. All approved

products, both innovator and generic, are listed in FDA's Approved Drug Products with Therapeutic Equivalence

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Evaluations (Orange Book). Generic drug applications are termed "abbreviated" because they are generally not

required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness. Instead,

generic applicants must scientifically demonstrate that their product is bioequivalent (performs in the same manner

as the innovator drug).

• Para I: A Para I filing is made by the applicant when there is no listed patent that is the subject of the ANDA

has been submitted to FDA.

• Para II: A Para II filing is made when the applicant plans to sell the generic drug for which patent is already

expired.

• Para III: A Para III filing is made when the applicant does not have any plans to sell the generic drug until

the original drug is off patent.

• Para IV: A Para IV filing for the launch of generic drug is made when the applicant believes its product or

the use of its product does not infringe on the innovator's patents or where the applicant believes such patents

are not valid or enforceable.

An ANDA applicant filing a Para IV certification must notify the proprietor of the patent. The patent holder may

bring a patent infringement suit within 45 days of receiving such notification. If the patent owner brings a patent

infringement charge in a timely manner against the ANDA applicant, then the USFDA suspends the approval of

the ANDA until the date of the court’s decision that the listed drug patent is either invalid or not infringed the

date on which the listed drug patent expires, Once the branded drug company indicates its intent to begin a patent

infringement suit against the generic company as a result of the paragraph IV filing, the USFDA is prohibited

from approving the drug in question for thirty months or until such time that the patent is found to be invalid or

not infringed. If, prior to the expiration of thirty months, the court holds that the patent is invalid or would not be

infringed, then the USFDA approves the ANDA when that decision occurs. Conversely, if the court holds that the

patent is valid and would be infringed by the product proposed in the ANDA prior to the expiration of thirty

months, then the USFDA does not approve the ANDA until the patent expires.

If a generic company is the first to file its ANDA with a Paragraph IV certification and prevails in the subsequent

lawsuit, that generic company is granted a period of market exclusivity of 180 days. The 180-day exclusivity

incentive can be significant for a generic company as it would be the only generic version in the market. So, it can

price its product slightly below the branded version for six months, take market share from the branded product,

and maintain its price point before other generics enter the market and erode the price and segment margins. The

additional profit for a generic firm can be enormous if the product it challenges is a so-called blockbuster or

megabrand.

As an alternate path to FDA approval for new indications or improved formulations of previously-approved

products, a company may file a Section 505(b)(2) New Drug Application (“NDA”), instead of a “stand-alone” or

“full” NDA. Section 505(b)(2) permits the submission of an NDA where at least some of the information required

for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained

a right of reference. The FDA may also require companies to perform additional studies or measurements to

support the change from the approved product. The FDA may then approve the new formulation for all or some

of the label indications for which the referenced product has been approved, or the new indication sought by the

Section 505(b)(2) applicant.

This approval route was designed to encourage innovation and to eliminate costly and time-consuming duplicative

clinical studies. The 505(b)(2) applicant may qualify for three or five years of market exclusivity, depending on

the extent of the change to the previously approved drug and the type of clinical data included in the NDA. This

distinguishes a 505(b)(2) from an ANDA, where exclusivity can be held for only 180 days. A 505(b)(2) application

may also be eligible for orphan drug or pediatric exclusivity.

Benefits to the players; the drug is generally eligible for the exclusive right to market for 180 days. This helps the

manufacturer to have a first mover advantage. It is a valuable opportunity to maximize profit margins without any

competition and can garner market share.

On the other hand, to challenge a patent in court, the generic applicant that submitted para IV certification must

notify the brand sponsor and any patent holder of the submission of the ANDA and patent challenge. Further, if

the brand product sponsor or the patent holder files an infringement suit against the applicant within 45 days of

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the notification, unless the patent expires or is judged to be invalid or not infringed before that time, FDA approval

to market the generic drug is postponed for 30 months, which is commonly referred to as the “30-month stay”

gives the brand product sponsor and patent holder a prescribed amount of time to assert patent rights in the court

before a generic competitor is approved and market the drug.

Indian Pharmaceuticals Market

The Indian Pharmaceuticals Market is the third largest in the World in terms of volume and tenth largest in terms

of value , as per Fiscal Year 2020 Annual Report of the Department of Pharmaceuticals, Government of India, the

Indian pharmaceutical industry. The total size of the industry (including drugs & medical devices) is around

US$43 billion (Rs.3,01,000 crore) and is currently having a growth rate of 7-8% in drug sector and 15- 16% in

medical device sector. Total exports (drugs and medical devices) are to the tune of US$20 billion (Rs.1,47,420

crore) of which drugs form around 90% of the total exports. The imports amount to around Rs. 72,800 crore of

which medical devices form around 52%. India is the largest provider of generic drugs globally. Access to

affordable HIV treatment from India is one of the greatest success stories in medicine. India is one of the biggest

suppliers of low-cost vaccines in the world. Because of low price and high quality, Indian medicines are preferred

worldwide, thereby rightly naming the country “the pharmacy of the world”. The Pharmaceutical sector currently

contributes around 1.72% to the country’s GDP.

Overview of the Domestic formulations market

The Indian Pharmaceuticals Market is valued at INR 148 thousand Crores as at March 31st, 2020 and is growing

at a CAGR of 9% from Fiscal year 2016 to 2020, as per IQVIA TSA, April 2020. Multinational companies

(‘MNCs’) contribute to 20% of Indian Pharmaceuticals Market while there are about 80% contribution coming in

from the domestic companies. MNCs have grown at a CAGR of 7% from Fiscal year 2016 to 2020 while domestic

companies have grown relatively faster at a CAGR of 10% during the same period. In terms of Rx growths while

the quantum of Rxs is generated by generalists the value per Rx is higher for Super specialists and mass speciality

and they continue to remain important levers for propelling IPM growths. Amongst the Zones while there is almost

equal share from across Zones in terms of growth East is showing promise and there are many companies who

are developing East zone and that is one important growth lever for them from Geography standpoint.

Exhibit*: Zone wise sales split

Zone Contribution % %CAGR from Fiscal 2016 to 2020

North 27% 8%

South 26% 8%

East 24% 12%

West 23% 9%

Source: IQVIA, TSA, April 2020

Top therapies like Cardiac, Respiratory and Antidiabetic have contributed strongly and consistently to the industry

growth whereas Dermaceuticals has seen a recent slowdown overall owing to slowing of Antifungal therapy

within Dermaceuticals.

Exhibit*: Therapy wise Break-up of Indian Pharmaceuticals Market

Therapy % Market Share Growth for Fiscal

Year 2020

% CAGR from Fiscal

Year 2016 to 2020

Cardiac 12.2% 12% 10%

Anti-Infective 12.1% 10% 6%

Gastro-Intestinal 10.1% 6% 7%

Anti-Diabetic 9.8% 11% 14%

Respiratory 8.3% 13% 11%

Nutrition 7.7% 7% 9%

Pain 7.7% 8% 8%

Dermaceuticals 7.4% 5% 12%

Neurology / CNS 5.9% 8% 8%

Gynecology. 4.9% 5% 8%

Source: IQVIA, TSA, April 2020

Export Remains a Key Focus for Indian Pharmaceuticals Companies

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As per Fiscal Year 2020 Annual Report of the Department of Pharmaceuticals, Government of India, Indian

pharma exports are destined to more than 200 countries including highly regulated markets of US, West Europe,

Japan and Australia. India exported pharmaceuticals to the tune of Rs. 1,33,910 crore with a recorded growth of

10.72% in 2018-19. Drug formulations & Biologicals was the third largest among the principal commodities

exported by India during 2018-19. India exports largely to USA, UK, South Africa and Russia. Imports of drugs

during 2018-19 was of Rs. 35,000 crore with bulk drugs and intermediates comprising 63% of the total

pharmaceutical imports followed by Drug Formulations and Biologicals (36%). India imports largely from China,

USA, Italy and Germany. The country has had surpluses in pharmaceutical trade as shown in the table below:

Exhibit *: Export and import in pharmaceutical sector since 2010-11 (USD bn)

Source: Annual Report 2019-20, The Department of Pharmaceuticals, Government of India

India accounts for 20% of global exports in generics. India’s Pharma exports mainly consist of Drug Formulations

and Biologicals up to 77% followed by Bulk drugs and intermediates up to 21%.

The Global pharma industry is historically dominated by United States of America, Western Europe and Asia

Pacific countries. While China, the second largest pharmaceutical market in the world and largest Pharmerging

market, is expected to hold its ranking during the next five years, the Pharmerging markets would make up nine

out of top twenty pharma markets. The global pharma invoice spending during 2019 as per IQVIA is

approximately USD $1,250 billion of which developed market (USD $821 billion) followed by Pharmerging

market (USD $357.7 billion), followed by Rest of the world market (USD $71 billion).

Exhibit *: Region wise India's pharmaceuticals exports during April-March (USD in million)

Region FY18 FY19 Change % Contribution %

North America 5348.00 6145.67 14.92 32.12

Africa 3346.97 3436.44 2.67 17.96

EU 2752.64 3003.91 9.13 15.70

ASEAN 1181.45 1310.14 10.89 6.85

LAC 1135.15 1308.30 15.25 6.84

Middle East 869.05 1074.11 23.60 5.61

South Asia 764.33 812.84 6.35 4.25

CIS 733.17 788.27 7.52 4.12

Asia (excluding Middle East) 627.30 693.62 10.57 3.62

Oceania 320.25 340.84 6.43 1.78

Other European Countries 150.99 162.86 7.86 0.85

Other America 52.48 57.38 9.33 0.30

Grand Total 17281.78 19134.38 10.72 100.00

Source: Pharmexcil, Annual Report 2019.

10.23

12.8014.15 14.65 15.13

16.61 16.45 16.91

18.75

3.774.63 4.92 4.69 4.87 4.89 4.45 4.89

5.65

0

2

4

6

8

10

12

14

16

18

20

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19Export Import

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While the pharmaceuticals industry’s information in USA markets have been elaborately discussed above, some

information on the other important markets are given hereunder.

European Markets: As per Pharmexcil, India’s Export to EU has increased from USD 2.75 billion in Fiscal year

2018 to USD 3 billion in Fiscal Year 2019 growing by 9.13% in the year and contributes to 15.7% of total

pharmaceuticals exports. From a medical spending prospective, UK & Germany remain key markets in Europe.

As per Pharmexcil, the German pharmaceutical market continues to lead Western Europe in terms of commercial

attractiveness. Substantial chronic disease burden, coupled with advanced healthcare infrastructure and easy

access to services, will continue to support this potential. However, caution to be exercised as Government, like

many others in Europe, are controlling costs through various measures and impacting on generics too.

For countries like France, cost-containment will remain high on the government's agenda and the pharmaceutical

market will remain a target of cost containment, posing challenges to drug makers, as per Pharmexcil. However,

a large and ageing population, high per capita spending on medicines and continued efforts by the government to

expand and improve access to healthcare will continue to secure France's position as one of the leading

pharmaceutical markets worldwide.

United Kingdom: The UK's pharmaceutical market is among the largest European markets. Medical expenditure

was USD 44.63 billion in 2017 and is expected to grow further to USD 51 billion by fiscal year 2021. As per

Pharmexcil, Generic drug market was at $ 12 billion in 2016. At a CAGR rate of 3.7% till 2021, the generic

market is forecasted to touch $ 14.4 bn. 84% of the prescriptions generated are of generic drugs. An ageing

population, a preference for innovative medicines and the population's access to new and advanced healthcare

technologies will result in the continued growth of the UK's pharmaceutical market.

Canada: It is a significant manufacturing base for pharmaceutical companies as well as a market in its own right.

Canada boasts of one of the best state sponsored Health care systems and high pharmaceutical health expenditure.

As per Pharmexcil, in 2017 Canada’s Pharma market was of the size USD 20.5 billion and has grown by 5%. It

is forecasted to grow by 8.4% in 2018 and reach $ 22.3 billion.

Canada’s historically high generic prices are now being targeted for downward price revisions. The margin of

difference between a generic and patented drug offers virtually no incentive to choose a generic. Generic drug

uptake in Canada is significantly less than patented medicines. This is due to several factors. Firstly, the price of

generic drugs is not significantly cheaper than their patented counterparts. Patented drugs have a regulatory

approval board which has some influence over pricing; however, there is no equivalent in place for generic

products. Drug pricing is generally allocated by province or territory, which can cause further discrepancies

between medicines in difference areas. Generic drug prescribing practices are still in need of greater

encouragement.

Brazil: Brazil has traditionally been Latin America’s largest pharmaceutical market. A peculiarity of the domestic

pharmaceutical market is the relatively low price of medicines in comparison to other large markets in the

Americas. As per Pharmexcil, by 2022, Brazilian Pharma market is expected to touch $ 31 bn. The fastest growing

drug sector in Brazil is bioequivalent generics, a trend that shows no signs of abating. While generic products

represent a large proportion of domestic consumption in volume terms, by value they account for 30% of total

prescription drug sales and 22% of total drug expenditure. Brazil's generic drug sector is the largest in Latin

America. It was valued at $ 5.25 billion. Forecast show it is likely to touch $ 6.5 bn by 2022 with a CAGR of

4.5%

China: It’s Pharma market is estimated at $ 140.3 billion in 2017 having grown by 29% as per Pharmexcil. It is

the largest market in Asia Pacific Region and second largest in the world. In 2018 the market is expected to reach

$ 142.26 Billion. China’s rapid ageing of the population and rising incomes will lead to a surge in demand for

medicines and quality healthcare services. Forecast of pharmaceutical sales show market may reach USD372.4bn

in 2027 with a CAGR of 9%.

Generic drug market spending to increase from USD 76.27 bn in 2017 to USD125bn by 2022, with a CAGR of

10%. In 2017, generic drugs accounted for 63.47% of total sales. Latest forecasts show that by 2018 ending market

is likely to touch $ 90.6 bn with 18 % growth.

South Africa: It’s pharmaceutical market size, makes it the key sub-Saharan market. MNCs are on the defensive

due to its, tough pricing environment which helps the generic industry. As per Pharmexcil, pharmaceutical sales

were around $ 3.2 billion in 2017 and is expected to grow around 19% in 2018 and touch $ 3.9 billion. The focus

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on cost containment, combined with a growing middle class and single exit pricing structure, and the thrust

government gives to local production in South Africa will drive greater demand for generic medicines. $1.2 billion

market in 2017 is expected to touch $ 1.4 bn in 2018. South Africa remains amongst top 5 Pharmaceuticals export

market for India with USD 619 million in fiscal year 2019 worth of pharma exports growing at 6.19% growth

over fiscal year 2018.

Recent key Policies affecting the Indian Pharmaceuticals Industry

National Pharmaceutical Pricing Policy 2012

The Department of Pharmaceuticals notified the National Pharmaceutical Pricing Policy-2012 (NPPP-2012) on

07.12.2012 with the objective to put in place a regulatory framework for pricing of drugs to ensure availability of

required medicines – “essential medicines” – at reasonable prices, while providing sufficient opportunity for

innovation and competition to support the growth of industry, thereby meeting the goals of employment and

shared economic well-being for all. The Government is now contemplating to introduce a new National

Pharmaceutical Policy with the following objectives:

• Making essential drugs accessible at affordable prices to the common masses;

• Providing a longer-term stable policy environment for the pharmaceutical sector;

• Making India sufficiently self-reliant in end-to-end indigenous drug manufacturing;

• Ensuring world class quality of drugs for domestic consumption & exports;

• Creating an environment for R&D to produce innovator drugs;

• Ensuring growth and development of the Indian Pharma Industry.

Foreign Direct Investments

FDI up to 100% in pharmaceutical sector is permissible through automatic route for greenfield investment and up

to 74% for brownfield investment. Beyond 74%, FDI in pharmaceutical sector for Brownfield investment is

permissible through Government approval route. Union Cabinet in its meeting held on 24.05.2017 approved the

abolition of the Foreign Investment Promotion Board (FIPB). The administrative Ministries/ Departments are to

process applications for FDI requiring Government approval. The proposals relating to Pharmaceutical Sector are

being handled by this Department, based on the Standard Operating Procedure (SOP) issued by Department for

Promotion of Industry and Internal Trade (DPIIT) and in consultation with related Government Agencies. After

abolition of FIPB, under approval route, Department of Pharmaceuticals has approved 25 FDI proposals worth

Rs. 2,496 crores approximately till now. Pharmaceutical is among the top eight sectors of India attracting FDI.

FDI in medical devices is under automatic route for both brownfield and greenfield sectors.

Umbrella Scheme – Development of Pharmaceuticals Industry

The Department of Pharmaceuticals, Government of India, has an umbrella scheme namely ‘Scheme for

Development of Pharmaceutical Industry’. Its objective is to increase the efficiency and competitiveness of

domestic pharmaceutical industry so as to enable them to play a lead role in the global market and to ensure

accessibility, availability and affordability of quality pharmaceuticals for mass consumption. This scheme is a

Central Sector Scheme (CS) with a total financial outlay of Rs. 480 crore for a three-year period starting from

2017-18 to 2019-20 and comprises the following five sub-schemes:

(a) Assistance to Bulk Drug Industry for Common Facility Centre: This sub-scheme proposes financial

assistance for setting up of Common Facility Centres (CFCs) in Bulk Drug Parks in the country at a total

cost of Rs. 200 crores for 2018- 2020. Financial assistance may be provided for creation of common

facilities under any upcoming Bulk Drug Park promoted by State Governments/State Corporations. The

Scheme would be implemented through a one-time grant-in-aid to be released to a State Implementing

Agency (SIA) set up for the purpose.

(b) Assistance to Medical Device Industry for Common Facility Centre: This sub-scheme proposes

financial assistance for setting up of Common Facility Centres(CFCs) in Medical Device Parks in the

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country at a total cost of Rs. 100 crore for 2018-2020. Financial assistance may be provided for creation of

common facilities under any upcoming Medical Device Park promoted by State Governments/State

Corporations. The Scheme would be implemented through a one-time grant-in-aid to be released to a State

Implementing Agency (SIA) set up for the purpose.

(c) Assistance for Cluster Development: This is an existing scheme of the Department, earlier known as

Cluster Development Programme for Pharma Sector (CDP-PS), now being subsumed under the umbrella

scheme. Under the scheme, financial assistance would be provided for creation of common facilities in any

pharma clusters including Bulk Drug, Medical Device, Ayurvedic, Unani and Cosmetics Units. Some of

the indicative activities under the Common facilities include Common Testing Facilities, Training Centre,

R&D Centers, Effluent Treatment Plant and Common Logistics Centre.

(d) Pharmaceutical Promotion and Development Scheme (PPDS): The Objective of Pharmaceutical

Promotion & Development Scheme (PPDS) is promotion, development and export promotion in

Pharmaceutical sector by extending financial support for conducting seminars, conferences, exhibitions,

mounting delegations to and from India for promotion of exports as well as investments, conducting

studies/ consultancies, for facilitating growth, exports as well as critical issues affecting Pharma sector.

(e) Pharmaceutical Technology Upgradation Assistance Scheme (PTUAS): The main objective of the

scheme is to facilitate Small and Medium Pharma Enterprises (SMEs) to upgrade their plant and machinery

to World Health Organization (WHO)-Good Manufacturing Practices (GMP) standards so as to enable

them to participate and compete in global markets. Assistance in the form of interest subvention against

sanctioned loan by any scheduled commercial bank/financial institution, both in Public and Private sector

will be provided to 250 pharma SMEs of proven track record.

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OUR BUSINESS

Some of the information in the following discussion, including information with respect to our plans and

strategies, contain forward-looking statements that involve risks and uncertainties. You should read “Forward

Looking Statements” on page 14 for a discussion of the risks and uncertainties related to those statements. Our

actual results may differ materially from those expressed in or implied by these forward-looking statements. Also

read “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of

Operations- Factors affecting our Financial Results” on pages 35 and 74, respectively, for a discussion of certain

factors that may affect our business, financial condition or results of operations.

Our financial year ends on March 31 of each year, and references to a particular Fiscal are to the twelve months

ended March 31 of that year. Unless context requires otherwise, the financial information used in this section for

the Fiscals 2020, 2019 and 2018 is derived from the Audited Consolidated Financial Statement and referred to

as such. For further information, see “Financial Statements” on page 180.

Overview

We are a vertically integrated pharmaceutical company, developing, manufacturing and marketing of formulations

offered in the international markets including in markets such as the United States, European Union, etc

(“International Generics”), formulations which cater to India’s domestic formulations market (“Domestic

Formulations”) and active pharmaceutical ingredients which cater to both domestic and international markets

(“APIs”). We have a presence and sell our products in over 65 countries including the United States, India,

Europe, Canada, Australia, Brazil and South Africa. We provide a diverse suite of products under each of our

business verticals - International Generics, Domestic Formulation and APIs. Our product portfolio in the Domestic

Formulations covers numerous chronic and acute therapy areas and in the International Generics, our products

and products in pipeline include oral solids, dermatology, oncology oral solids, oncology injectables, general

injectables and ophthalmology. For Fiscal 2020, we derived 53.69%, 30.95% and 15.36% of our revenue from

operations from our International Generics, Domestic Formulations and APIs business, respectively.

We have a broad portfolio of Abbreviated New Drug Applications (“ANDAs”) for our International Generic

business filed with the United States Food and Drug Administration (“USFDA”). As of June 30, 2020, we have

received approval for 125 ANDAs including 14 ANDAs which have received tentative approval from USFDA.

Our filings in the United States focus on oral solids (oncology and non-oncology), injectable products (oncology

and non-oncology), ophthalmic and dermatological.As of March 31, 2020, we had successfully launched 76

products in the United States, which we sell through pharmacy chains, wholesalers and distributors. We

manufacture APIs for captive consumption as well as for selling to the customers in domestic and international

markets. As of March 31, 2020, we have filed 123 Drug Master Files (“DMFs”) with the USFDA for our API

products in multiple therapeutic areas, out of which 109 DMFs are active.

We have a presence in the Domestic Formulations market which caters to chronic and acute therapies including

cardiology, anti-diabetic, gynaecology, gastrology, dermatology, orthopaedic, ophthalmology, nephrology /

urology, anti-infective, cold and cough, and veterinary segment.

We rank 21 in Indian Pharma Market (“IPM”) as of March 31, 2020 (Source: March MAT data of IQVIA, TSA

March 2020) with a 1.5% market share in IPM (Source: IQVIA, TSA March 2020). Further, three of our brands

featured amongst the top 300 pharmaceutical brands in India (Source: IQVIA, TSA March 2020).

We operate three R&D centres located at Vadodara (Gujarat, India), Hyderabad (Telangana, India) and at West-

Caldwell (New Jersey, United States). We also have a USFDA approved Bioequivalence Centre, located at

Vadodara (Gujarat, India) which provides support for bioavailability (BA) and bioequivalence (BE) studies and

support our R&D activities. As of March 31, 2020, we employed about 1,100 professionals in our R&D centres

working on APIs and various dosage forms of formulations. Some our R&D efforts are also focused on developing

niche, specialty products to strengthen our product offerings. We dedicate a substantial portion of our revenue

from operations towards R&D activities. Our R&D spend as a percentage to revenue from operations has increased

from 5.92% in Fiscal 2015 to 14.00% in Fiscal 2020.

Further, owing to our strong R&D, we have been granted 911 patents worldwide (for both APIs and formulations),

including patents which have been withdrawn, abandoned or have lapsed, as of March 31, 2020.

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We have one facility engaged in the manufacturing of Domestic Formulations located in Sikkim. Two of our

facilities are engaged in the manufacturing of International Generic formulations located in Gujarat out of which

one facility is operated by our joint venture. Three of our facilities for manufacturing APIs are located in Gujarat.

All these facilities are currently commercially operational. The manufacturing units which are responsible for

manufacturing our products which are sold in regulated markets (including the United States, Canada, United

Kingdom), comply with applicable regulations and standards and also comply with the targeted markets’

regulatory requirements, for example that of, USFDA’s current Good Manufacturing Practices (“CGMPs”), the

United Kingdom’s medicines and healthcare products regulatory agency (“MHRA”), the Brazilian Health

Regulatory Agency (“ANVISA”), European Directorate for Quality of Medicines (“EDQM”), Australian

Therapeutic Goods Administration (“TGA”), etc. As on date, the Establishment Inspection Report (“EIR”) from

USFDA is in place for each of our operational facilities, where applicable. For more details regarding our

manufacturing facilities, see “ Manufacturing Process and Facilities” on page 113.

Driven by a strong management team, our consolidated revenue from operations for Fiscal 2020 was ₹ 4,605.75

crores which was up by 17.06%, compared to ₹ 3,934.68 crores for Fiscal 2019. Our Consolidated PAT for Fiscal

2020 grew by 41.83% to ₹ 828.82 crores from ₹ 584.37 crores for Fiscal 2019.

Our Strengths

The following are our key strengths which we believe enable us to compete in our principal markets:

Focused approach towards the United States formulations business

We believe that our track record of development and filing of ANDAs, ability to meet compliance standards and

ensuring timely delivery of products have been instrumental in driving our success in the United States market.

Consequently, we have been able to increase our product portfolio, deepen our relationships with existing

customers and increase the number of new customers during the past year. For the United States formulations

business, we are focused on launching products across various therapies and dosage forms to maximise existing

and emerging opportunities.

In the United States markets, historically, we started off selling our products to the companies or distributors.

Subsequently, we have set-up our own front-end office in the year 2015 to sell our products under the Alembic

label. In the year 2016, we also formed a joint venture named Aleor Dermaceuticals Limited (“ADL”) with

Orbicular Pharmaceuticals Technologies Private Limited for developing dermatology products for international

markets. During the Fiscal 2019, ADL launched its products in the United States market. As of June 30, 2020,

ADL had received nine approvals including one ANDA which has received a tentative approval.

Through Alembic Global Holding SA incorporated in Switzerland, our wholly owned subsidiary, we have made

an investment in Rhizen Pharmaceuticals SA (“Rhizen”), incorporated in Switzerland. Rhizen has been in the

past, involved in out-licensing its products to other companies in the United States market . Rhizen’s first product

was licensed out to TG Therapeutics which is undergoing a new drug application filing with the USFDA.

High compliance standards across manufacturing facilities with focus on quality assurance

We believe that quality and compliance are the key differentiators in our business and that our focus and emphasis

on maintaining requisite compliance standards across our plants is a key driver in our business. We believe that

the integrated nature of our standard operating procedures, multiple quality checks across the organisation and

round the clock audit preparedness ensures that we maintain such standard at all times.

As on date, the Establishment Inspection Report (“EIR”), which is a factual report issued by the USFDA pursuant

to an inspection it conducts on the factory premises of a company, is in place for each of our USFDA facilities.

The location of our facilities, division, the capabilities thereof and the major approvals received by each of them

is given below:

Location Division Capability Key Approvals

Panelav, Gujarat (F1) Formulations –

International Generics

Tablets, Capsules USFDA

Panelav, Gujarat (F2) Formulations – Oncology oral solids USFDA

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International Generics Oncology injectables Awaiting FDA inspection

Karkhadi, Gujarat

(F3)

Formulations –

International Generics

General injectables ophthalmic Awaiting USFDA inspection

Jarod, Gujarat (F4) Formulations –

International Generics

Tablets, Capsules Awaiting USFDA inspection

Karkhadi, Gujarat

(ADL JV)

Formulations Various dermaceutical

formulations

USFDA

Panelav, Gujarat

(API Unit 1)

API API USFDA, ANVISA, EQDM, HPCD

(Canada), EU GMP (Germany),

WHO GMP

Panelav, Gujarat

(API Unit 2)

API API USFDA, HPCD (Canada), EU

GMP (Germany), WHO GMP

Karkhadi, Gujarat

(API Unit 3)

API API USFDA, MHRA (UK), TGA GMP

(Australia) , WHO GMP

Samardung Busty,

Sikkim (Domestic)

Domestic Formulations Tablets, Capsules WHO GMP

We believe our manufacturing facilities are capable of producing a wide range of products, enabling us to position

ourselves as suppliers to customers across the globe.

Well established presence in Domestic Formulations market

We develop, manufacture, market and sell branded pharmaceutical products in select therapeutic areas within the

chronic and acute categories of the Indian pharmaceutical market (“IPM”). Our Domestic Formulations business

accounted for 30.95%, 35.13% and 40.69% of our revenue from operations, for Fiscals 2020, 2019 and 2018,

respectively and continues to be a significant part of our growth strategy in the future.

Further, we have been consistently increasing our presence in the specialty therapies, including cardiology,

diabetes, gynaecology, ophthalmology and veterinary. Specialty remains our key focus area with 64.92% share of

our Domestic Formulation business and acute segments consisting of cough and cold and anti-infective therapies

with 35.08% share of our Domestic Formulation business, for the Fiscal 2020. Domestic Formulation business

contributed towards 30.95% of our total consolidated revenue from operations in Fiscal 2020.

We rank 21 in IPM as of March 31, 2020 (Source: March MAT data of IQVIA, TSA March 2020) with a 1.5%

market share in domestic pharma space in India (Source: IQVIA, TSA March 2020). Further, three of our brands

featured amongst the top 300 pharmaceutical brands in India (Source: IQVIA, TSA March 2020).

Our sales team comprised of around 5,000 field colleagues, as of March 31, 2020, which allows us to

commercialise our pharmaceutical products.

Strong R&D capabilities with substantial spending over last few years

We are a R&D focussed company and we believe that our strong R&D expertise are critical for our success across

businesses. Our formulations R&D activities include development of various dosage of formulations (such as

OSD and injectables, oncology and dermaceutical products) and is supported by strong dedicated teams for

analytics, documentation and IPR. We also have API development teams focused on developing and filing our

DMFs with the USFDA.

We have three R&D centres in Vadodara (Gujarat, India), Hyderabad (Telangana, India) and West-Caldwell (New

Jersey, United States) with about 1,100 R&D professionals across these centres. Our R&D activities primarily

include developing new products, improving existing products, improving /innovating drug delivery systems and

expanding product applications. Historically, we have invested significantly to augment our R&D capabilities

specifically around therapies (including cardiovascular, oncology, peptides, central nervous system),

dermaceuticals and injectables (general and oncology). We proactively scan our R&D grid to realign our product

portfolio by mapping it with the critical factors such as potential to garner desired market share by focussing on

the United States market and generate profits.

As of June 30, 2020, we have received approval for 125 ANDAs including 14 ANDAs which have received

tentative approval from USFDA. Our filings in the United States focus on oral solids (oncology and non-

oncology), injectable products (oncology and non-oncology), ophthalmic and dermatological. As of March 31,

2020, we had launched 76 products in the United States. As of March 31, 2020, we have filed 123 DMFs with the

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USFDA for our API products in multiple therapeutic areas, out of which 109 DMFs are active. We spent ₹ 644.82

crore (14.00% of our total revenue from operations), ₹ 503.64 crore (12.80% of our total revenue from operations)

and ₹ 411.28 crore (13.14% of our total revenue from operations) in R&D expenditure during Fiscal 2020, Fiscal

2019 and Fiscal 2018, respectively. We have been granted 911 approximately patents worldwide (for both APIs

and formulations), including patents which have been withdrawn, abandoned or have lapsed, as of March 31,

2020.

Our commitment towards R&D is well evidenced from our increasing R&D spend as a percentage of total revenue

from operations, which has substantially increased from 5.92% of revenue from operations in Fiscal 2015 to

14.00% of revenue from operations in Fiscal 2020.

Vertical integration leading to operating leverage and supply reliability

We are a vertically integrated pharmaceutical company with in-house sourcing of APIs for several of our products.

We have invested financial and manpower resources in building infrastructure for the manufacture of APIs and

generic formulations in order to become a vertically integrated pharmaceutical company. We believe, our in-house

manufacturing of APIs has provided us with a competitive advantage in the generic formulations market through

helping us maintain quality control, mitigate the demand-supply fluctuations that routinely affect generics markets

and provides consistency and reliability of supply. We believe that our vertically integrated manufacturing

approach coupled with our process, supply chain and productivity efficiencies, contribute to our production cost

advantage and offers competitive advantage to us. We continue to improve and assess our programs designed to

increase efficiency and enhance economies of scale in order to further reduce costs.

Diversified product offering across therapeutic categories to various geographies

Our business is diverse in terms of therapeutic areas and geographies catered to, thereby mitigating concentration

risks. We offer a wide range of products across several major therapeutic categories, including cardiology, anti-

diabetic, gynaecology, gastrology, dermatology, orthopaedic, ophthalmology, nephrology / urology, anti-infective

and cold and cough. Our products (including products in pipeline) cover variety of dosage forms including oral

solids, dermatology, oncology oral solids, oncology injectables, general injectables and ophthalmology. We

believe that the depth and diversity of our product portfolio benefits our customers by providing them with a

single dependable source for a substantial number of their pharmaceutical requirements. Our large product

portfolio also helps us realise sales and distribution synergies. Further, we believe that a diversified product

portfolio such as ours, across various therapies and geographies, diminishes the risk associated with the

dependence on any particular product or country. No single product accounted for more than 5% of our total gross

revenues from operations for the Fiscal 2020 and our revenues were diversified across over 65 countries.

Experienced Management Team

We are led by a qualified and experienced management team with the vision and expertise to help manage and

grow our business. In addition to our Promoters, each of whom has extensive experience and a strong background

in the pharmaceutical industry, we also have a qualified strong senior management team that has significant

experience in all aspects of our business. We have been able to attract and retain senior and middle-level

management executives from top tier organizations. We believe that the knowledge and experience of our

Promoters in healthcare, along with that of our senior and middle-level management, provides us with a strong

platform as we seek to expand our business in existing markets and enter new geographies.

Our Strategies

Expand and improve our United States formulations products portfolio

Our strategy in the United States is to continue to focus on the existing and new formulations and enhance our

product portfolio by accelerating ANDA filings. Our United States formulations business has grown to ₹1,976.00

crore in Fiscal 2020, accounting for 42.90% of total revenue from operations on a consolidated for the Fiscal.

United States formulation business remains a significant growth engine for us and has grown at a CAGR of

44.28% from Fiscal 2015 to Fiscal 2020. We also believe that we have the ability to deliver quality products in a

timely manner as per the customers’ orders.

We are looking to launch new and distinct products and enhancing the value proposition of our existing products.

Our focus is on developing complex, niche products having limited competition. With this view, during the last

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four Fiscals, we have significantly invested in our manufacturing and R&D capabilities with focus on expanding

and improving our current product offerings specially in the United States.

We are in the process of expanding our capacity to allow us to have enhanced new dosage offerings across

ophthalmology, general injectables, oncology injectables and oral solids (oncology and non-oncology) and will

be able to cater to the demand in United States generics segment. We have already started commercial production

in our dermaceuticals plant under our joint venture, ADL.

Over the years, we have invested significantly to augment our R&D capabilities across several high-growth and

high-value therapies. Our R&D expenses as a percentage to our revenue from operations have increased from

5.92% in Fiscal 2015 to 14.00% in Fiscal 2020. Bulk of our R&D investments are focused towards the United

States formulations business. We believe that this R&D focussed approach has dividends over the years and we

remain hopeful of it yielding growth in the United States business segment. In order to optimize the R&D

investments, several filters are applied by cross-functional teams before taking a product in the R&D grid.

We have experience in 505(b)(2) filings for new drug applications and paragraph IV filings for ANDAs required

by the USFDA. We filed/acquired 25, 29 and 37 ANDAs in the United States in Fiscals 2020, 2019 and 2018,

respectively. Our portfolio which was largely dominated by oral solids is now being expanded to include

ophthalmology, dermaceuticals, oncology (oral solids) and injectables (oncology and general) owing to our R&D

efforts.

Strengthen our Domestic Formulations business through consolidating our presence and venturing into new

fast growth therapy segments

Our Domestic Formulations business accounted for 30.95%, 35.13% and 40.69% of our revenue from operations

for Fiscals 2020, 2019 and 2018, respectively and continues to be a significant part of our growth strategy in the

future. In this segment, we cater to therapeutic areas such as cardiology, anti-diabetic, gynaecology, gastrology,

dermatological, orthopaedic, ophthalmology, nephrology / urology, anti-infective and cold and cough and

veterinary segment. We believe that our sales team of around 5,000 field colleagues and right product launches

are key enablers for this business. From Fiscal 2018 to Fiscal 2020, our Domestic Formulations business has

grown at a CAGR of 5.78%.

In addition to consolidating presence in our existing brands and therapeutic areas, we have also focused our efforts

on pursuing opportunities in fast growing therapeutic areas where we believe we can grow our presence, such as,

cardiology, diabetes, gynaecology and ophthalmology. Our strategy for expansion in existing and new therapeutic

areas includes extending our focus to target lifestyle disorders and the chronic category (to target products that

have to be prescribed over an extended period of time as opposed to one time incidence related medication),

identifying gaps in existing interventions, analysing patient compliance, and working with key opinion leaders,

doctors and patients through active engagement to develop, manufacture and market new indications which fulfil

an unmet need or are clinically differentiated.

We also have invested in sales force management system, which captures data at the headquarters and employee

levels, to make our sales staff more productive. Our marketing team utilises a variety of marketing techniques and

programs to promote our products. We believe that focusing on marketing will help us in enhancing emphasis on

the product coverage that we offer and improving our market share in India.

Leverage our API business to improve our competitive advantage in International Generics business

Our API business is strategically important since it allows us to backward integrate our operations. Our API

business helps us reduce cost and increase revenue margin and timely delivery of raw materials of desired quality

and quantity for our International Generics business. We believe that our presence in API production improves

our ability to maintain quality and mitigates the demand-supply fluctuations that affect generics markets thereby

providing for consistency and reliability of supply in an increasingly regulated global environment. It further

protects us from relying on external sources for our raw materials, thereby reducing risk of unfavourable terms of

supply such as high pricing and long timeline for delivery.

In our International Generics business, critical oral solids portfolio is backward integrated in terms of API

supplies. Beyond backward integration, our API business also acts as a key focus area as it continues to grow in

the regulated markets and we are a preferred vendor to our customers owing to the quality of our products and

dependability. The key strengths of our API business are our manufacturing expertise and a good compliance

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track record. We have implemented several measures to enhance operational efficiency of this business including

automation of our processes to reduce contamination.

We have three USFDA approved API facilities, two in Panelav (Gujarat, India) and one in Karkhadi (Gujarat,

India) which underwent USFDA audits and have received EIR for each of the units. Our API facilities are located

closer to our formulations units, thereby giving us significant operational efficiencies. As of March 31, 2020, we

have filed 123 DMFs with the USFDA for our API products in multiple therapeutic areas, out of which 109 DMFs

are active.

Continue to grow our business outside of India and the United States

We intend to continue to grow our sales in existing geographies in Europe, Canada, Australia, South Africa and

Brazil by increasing our existing product portfolio in these markets. Our growth strategy will vary from country

to country depending on applicable regulatory requirements, competition in the product portfolio and

demographics. We intend to capitalise on selected products that we develop for the United States in these markets.

We are hopeful that we will be able to create a strong local presence and expertise with required infrastructure

and develop capabilities in order to grow in these potential markets.

In markets apart from India and the United States, we predominantly sell our products through distributors or

partnerships. In some markets, we work on semi exclusive basis wherein we offer exclusivity for some products

within that market / country. We identify and assess the suitability of potential marketing partners on the basis of

their strengths in that market. We would like to deepen our partnerships in these markets in order to further drive

our marketing efforts. We derived 10.79%, 12.54% and 9.15% of our revenue from operations in Fiscals 2020,

2019 and 2018, respectively, from these countries/regions.

Description of our Business

We are a vertically integrated pharmaceutical company, developing, manufacturing and marketing of International

Generics, Domestic Formulations and APIs. In the pharmaceutical value chain our business operations are

classified in two broad categories: (i) Formulations; and (ii) API. Our formulations business is further categorized

into: (i) Domestic Formulations; and (ii) International Generics business, primarily to the United States, Europe,

Canada, Australia, South Africa and Brazil. We manufacture and captively consume APIs for our formulations

and sell APIs in domestic and international markets.

The following table provides a summary of the contribution of each of our businesses to our revenue from

operations from each business line for Fiscals 2020, 2019 and 2018:

(₹ in crore)

Business Line Fiscal 2020

% of

revenue

from

operations

Fiscal 2019

% of

revenue

from

operations

Fiscal 2018

% of

revenue

from

operations

Formulations

International Generics 2,472.84 53.69% 1,782.20 45.29% 1,206.38 38.53%

India Branded 1,425.32 30.95% 1,382.32 35.13% 1,273.83 40.69%

Total Formulations 3,898.16 84.64% 3,164.52 80.43% 2,480.21 79.22%

APIs

Exports 542.75 11.78% 647.42 16.45% 549.04 17.54%

Domestic 164.84 3.58% 122.74 3.12% 101.56 3.24%

Total APIs 707.59 15.36% 770.16 19.57% 650.60 20.78%

Revenue from Operations 4,605.75 100.00% 3,934.68 100.00% 3,130.81 100.00%

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International Generics business

We manufacture generic formulation products for sale outside India. Our primary markets are (a) the United

States; (b) rest of the world, with a focus on Europe, Canada, Australia, Brazil and South Africa. Our focus is

primarily on niche therapeutic areas and complex products in these markets. Our core strength lies in developing

and manufacturing pharmaceutical products in-house, which we primarily commercialise through our distribution

network.

• United States generics business

In the United States, we aspire to focus on those formulations/products which are either difficult to formulate /

manufacture and has limited competition. United States is currently our largest market and we derived 42.90%,

32.75% and 29.39% of our revenue from operations during Fiscals 2020, 2019 and 2018, respectively, from the

formulations sales within the United States. From Fiscal 2018 to Fiscal 2020, our generics business in the United

States has grown at a CAGR of 46.55%. As of June 30, 2020, we have received approval for 125 ANDAs including

14 ANDAs which have received tentative approval from USFDA.

We have launched 76 products in the United States market as of March 31, 2020, of which 69 products are sold

directly by us through our own front-end marketing team and seven are sold through our partners. We would

typically enter into Master Service Agreements with our distributors for sale of our formulations in the United

States. Finished products are manufactured at our formulation plants in India and are shipped to third party

warehouse in Indianapolis, United States. Our front-end sales team generates sales orders based on order received

from end customers in United states and subsequently these products are invoiced and shipped from the

warehouse.

Further, certain of our distributor contracts / wholesaler contracts contain obligations for us to meet minimum

supply obligations, subject to exceptions for inability to supply due to reasons beyond our control. As per the

terms of such minimum supply obligations, we may be required to pay penalties, which are typically calculated

based of the amount of the shortfall in the supply, calculated for each product being supplied.

• Rest of the World Generic business

Outside of India and United States, we sell our formulation products in rest of the world which includes

geographies such as Europe, Canada, Australia, South Africa and Brazil. We derived 10.79%, 12.54% and 9.15%

of our revenue from operations during Fiscals 2020, 2019 and 2018, respectively, from such

countries/geographies. In terms of revenue from operations, we have grown our business outside of India and

United States at a CAGR of 31.72% from Fiscal 2018 to Fiscal 2020.

Domestic Formulations Business

India is our second largest market and we derived 30.95%, 35.13%, 40.69% of our total revenue from operations

during Fiscals 2020, 2019 and 2018, respectively, from our Domestic Formulations business. In India, our

products are primarily focused on the cardiology, diabetes, gynaecology, gastrology, anti-infectives and cough

and cold segments. Some of the key brands are Azithral, Althrocin, Wikroryl, Roxid, Rekool, Zeet, Tellzy, Ulgel

and Gestofit, amongst others. Our Domestic Formulations business has grown at a CAGR of revenue from

operations at 5.78% for the last three Fiscals.

The table below lists out our key therapeutic areas as of March 31, 2020:

Therapy Therapy Growth %

(ORG)(1)

Alembic Market

Share % (ORG)

(1)

Alembic Growth

% (ORG) (1)

Alembic Growth

% (PRIM)

Anti-Diabetic 13 1.5 3 3

Cardio 12 2.1 7 6

Nephrology / Urology 11 2.1 4 6

Ophthalmology 11 1.4 2 8

Gynaecology 10 2.6 0 3

Orthopaedic 9 1 13 4

Gastrology 9 1.5 -3 -9

Dermatology 9 0.4 -10 -12

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Therapy Therapy Growth %

(ORG)(1)

Alembic Market

Share % (ORG)

(1)

Alembic Growth

% (ORG) (1)

Alembic Growth

% (PRIM)

Cold & Cough 18 4.9 20 13

Anti - Infective 13 3 14 10

Overall 11 1.5 7 5

(1) Source: IQVIA, TSA March 2020

API Business

Our API business is strategically important since it allows us to backward integrate our operations. We

manufacture API products which are used for captive consumption and are also sold to customers for various

international markets. Our API business helps us vertically integrate and thus reduce cost and increase revenue

margin and timely delivery of raw materials of desired quality and quantity for our formulations business. Our

backward integration of formulations business ensures steady supply of APIs at an equitable cost, minimizing any

market fluctuations. In the United States formulations portfolio, a majority of our products are backward

integrated. It further protects us from relying on external sources for our raw materials, thereby reducing risk of

unfavourable terms of supply such as high pricing and long timeline for delivery.

As of March 31, 2020, we have filed 123 DMFs with the USFDA for our API products in multiple therapeutic

areas, out of which 109 DMFs are active. From this segment we derived 15.36%, 19.57% and 20.78% of our

revenue from operations during Fiscals 2020, 2019 and 2018, respectively.

Research & Development

Over the past few years, we have been focusing on R&D and have invested in R&D to augment our R&D

capabilities across several therapies. We have three R&D facilities in Vadodara (Gujarat, India), Hyderabad

(Telangana, India) and West-Caldwell (New Jersey, United States) with a team of about 1,100 professionals across

centres.

In addition to the above, we also have a Bioequivalence Centre, located at Vadodara (Gujarat, India) which

services to support R&D activities. The centre is inspected by various regulatory agencies, such as USFDA,

Bahagian Regulatori Farmasi Negara (Malaysia), ANVISA (Brazil) and DCGI (CDSCO).

As of June 30, 2020, we have received approval for 125 ANDAs including 14 ANDAs which have received

tentative approval from USFDA. We spent 14.00%, 12.80%, and 13.14% of total revenue from operations in R&D

expenditure during Fiscal 2020, 2019 and 2018, respectively.

Manufacturing Process and Facilities

We have the capability to manufacture APIs and finished-formulation dosages. We have fully integrated

manufacturing support systems at each of our facilities, including quality assurance, quality control, regulatory

affairs and inventory control. The existence of these support systems enable us to complete and deliver our

products to our customers while also monitoring regulatory compliance. Each of our manufacturing sites has an

on-site quality unit with clearly defined functions supported by a corporate quality group. All of our plants have

waste management and environment protection systems and comply with the laws on environmental pollution.

Each of our manufacturing facilities is compliant with cGMP, as applicable.

We have three API manufacturing facilities and six formulation production facilities in India of which three are

commercially operational. The table set forth below certain details in relation to our manufacturing facilities:

Location Division Dosage Form Status

Panelav, Gujarat (F1) Formulations - International

Generics

General oral solids Commercially operational

Panelav, Gujarat (F2) Formulations - International

Generics

Oncology oral solids Commercial production yet

to start

Oncology injectables Awaiting FDA inspection

Karkhadi, Gujarat (F3) Formulations - International

Generics

General injectables

ophthalmic

Awaiting FDA inspection

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Location Division Dosage Form Status

Jarod, Gujarat (F4) Formulations - International

Generics

General oral solids Awaiting FDA inspection

Karkhadi, Gujarat (ADL

JV)

Formulations Various dermaceuticals

formulations

Commercially operational

Panelav, Gujarat (API Unit

1)

API - Commercially operational

Panelav, Gujarat (API Unit

2)

API - Commercially operational

Karkhadi, Gujarat (API Unit

3)

API - Commercially operational

Samardung Busty, Sikkim

(Domestic)

Domestic Formulations General oral solids and

liquids

Commercially operational

Raw Materials

For our International Generic formulations, APIs are manufactured in-house as well as procured from domestic

and international suppliers. Arrangements with raw material and packing material suppliers are subject to, among

other things, regulatory requirements, various import duties and other government clearances. We generally do

not have long term contracts with any of our suppliers and we source raw materials from multiple suppliers on

purchase order basis. However, in certain cases, we enter into long term supply contracts with certain suppliers

for certain raw materials.

The total cost of our raw materials, packaging materials and excipients during Fiscal 2020 amounted to ₹ 1,039.39

crore.

We have in-house planning and inventory control teams that works alongside the manufacturing team to determine

procurement requirements for manufacturing finished products, creating production plans and ensuring

availability of raw materials and packaging materials. These teams monitor inventory and finished products

against various factors, including capacity, availability of labour and minimum and maximum stocks. For this

purpose Information Technology systems are extensively used. These teams also aims to identify alternate

suppliers for our raw materials requirements, including API.

Quality Control

We believe that maintaining high standard of quality of our products is critical to our brand and continued success.

Across our various manufacturing facilities, we have put in place various systems for ensuring consistent quality,

efficacy and safety of our products.

Our facilities are regularly inspected for compliance with cGMP. We are compliant with standards set by WHO,

USFDA and such other regulatory authorities. Our audit procedures are also regularly updated to comply with

any changes in international regulatory requirements, such as those of the USFDA. Some of our manufacturing

facilities have received approvals from USFDA, EDQM, MHRA, TGA, ANVISA and have received

accreditations from WHO, certificate of GMP compliance of a manufacturer (Freie Und Hansestadt Hamburg,

Germany), certificate of GMP compliance of a manufacturer (Danish Medicines Agency, Denmark), amongst

others.

Sales and Distribution

We market and distribute our products in many countries, either directly through our Subsidiaries or indirectly,

through supply, distribution and other arrangements with various global companies and local distributors.

Our export markets include geographies such as the United States, Canada, Brazil, Europe, Australia and South

Africa. Apart from United States, we predominantly sell products in the international geographies through

distributors or partnerships. We identify and assess the suitability of potential marketing partners on the basis of

their strengths in that market.

In the United States, we have our own front-end marketing team responsible for marketing and distribution of

products. In United States, we have a lean team of 12 people on our front end through which we market bulk of

our products. However, we also have a few products in this market which we sell through our marketing partners.

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In India, our sales team comprises of around 5,000 field colleagues, as of March 31, 2020. Our nationwide sales

force is comprised of representatives that typically have significant pharmaceutical sales experience in their

respective geographic regions.

Our APIs are sold in more than 50 countries including in India through dedicated relationships with large

formulators and distributors.

Competition

The global pharmaceutical market can broadly be divided into advanced regulated markets and emerging markets.

Emerging markets such as Africa and South East Asia have less onerous entry barriers in terms of regulatory

requirements, including with respect to qualification processes and intellectual property rights. The advanced

regulated markets such as the United States have stricter regulatory entry barriers. As a result, there is a premium

for quality and regulatory compliance along with more transparent economics in the advanced regulated markets.

We compete with companies in the Indian market based on therapeutic and product categories, and within each

category, upon dosage strengths and drug delivery. Our principal competitors for the export of generic

formulations from India include, among others, Aurobindo Pharma Limited, Sun Pharmaceuticals Industries

Limited, Dr. Reddy’s Laboratories Limited, Lupin Limited, Cipla Limited and Alkem Limited. Further, in global

markets, we compete with local companies, multinational corporations and companies from other emerging

markets. In addition, as we grow our International Generic formulations business, we expect competition from

major International Generic manufacturers.

Patent and Trademarks

We own products and process patents for various pharmaceutical processes and technologies. We have been

granted 911 approximately patents worldwide (for both APIs and formulations), including patents which have

been withdrawn, abandoned or have lapsed, as of March 31, 2020. Further, as of June 30, 2020, we owned 574

registered trademarks, including our logo.

Regulatory and Environmental Matters

Our products sold in developed markets are subject to regulation by their respective government entities, including

the USFDA, EDQM, MHRA, TGA, ANVISA, WHO, Health Product Compliance Directorate, Canada amongst

others. To varying degrees, each of these agencies requires us to adhere to laws and regulations governing the

development, testing, manufacturing, labelling, marketing and distribution of our products, in their respective

regions.

We develop and implement work safety measures and standards to ensure a safe working environment at our

manufacturing facilities and seek to ensure that the work we undertake does not pose any danger to our employees

or the general public. We comply with applicable health and safety regulations. We implement efforts to educate

our employees in occupational, health and safety procedures.

We are also subject to significant national and state environmental laws and regulations regarding the discharge,

emission, storage, handling and disposal of a variety of substances that may be used in or produced from our

operations at our facilities. Failure to comply with the applicable laws and regulations may subject us to penalties

and may also result in the closure of our facilities.

Insurance

We have industrial all risk policy for our manufacturing facilities insuring all of our assets such as buildings, plant

and machinery, furniture, fixtures and fittings, stocks and stocks from risks such as fire, earthquake and machinery

breakdown. We maintain a global product liability insurance, clinical trials insurance, director and officer’s

liability insurance and comprehensive general liability insurance (covering product liability) for the products that

we manufacture and sell. We also maintain medical insurance policies for our employees. We believe that our

insurance coverage is consistent with industry standards for companies in India.

Our policies are subject to customary exclusions and customary deductibles. For additional details relating to our

product liability insurance, see “Risk Factors - Our insurance coverage may not adequately protect us against all

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losses. To the extent that we suffer loss or damage which is not covered by insurance or exceeds our insurance

coverage, our results of operations and financial performance could be adversely affected.” on page 52.

Employees

As of March 31, 2020, we had 11,576 full-time employees, excluding contract labourers. Our personnel policies

are aimed at recruiting talented individuals and promoting the development of their skills, including through in-

house as well as external training programmes.

Properties

Our Registered and Corporate Office is located at Alembic Road, Vadodara - 390 003 and is occupied by us on a

leave and license basis. The other properties we have availed on a leave and license basis and own serve as

locations for manufacturing facilities and R&D centres.

Corporate Social Responsibility

We conduct and undertake our social responsibility activities primarily through Alembic CSR Foundation to drive

our corporate responsibility initiatives. We have identified education, health, water, sanitation & hygiene, sports,

art & culture, environment, livelihood, rural development projects, and slum area development as our primary

focus areas.

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ORGANISATIONAL STRUCTURE

Alembic Global Holding SA (AGH)

(Switzerland)

ALEMBIC PHARMACEUTICALS LIMITED (APL) (India)

Incozen Therapautics

Pvt Ltd

(Hyderabad, India)

Alembic Global

Holding SA (DMCC &

RAKTZ

Branch - Dubai

Alembic Mami

SPA

(Algeria)

SPH Sine Alembic

(Shanghai)

Pharmaceutical

Technology

Company Limited

(China)

Alembic

Pharmaceuticals

Inc. (USA)

Aleor Dermaceuticals

Limited (India)

Alembic Labs

LLC

Okner Realty

LLC

Rhizen

Pharmaceuticals

SA (Switzerland)

DAHLIA

Therapeutics

SA

(Switzerland)

Rhizen

Pharmaceuticals

Inc. (USA)

Rhizen

Pharmaceuticals

SA DMCC

Alembic

Pharmaceuticals

Europe Limited

(Malta)

Alembic

Pharmaceuticals

Australia Pty

Limited

(Australia)

Alembic

Pharmaceuticals

Canada Limited

(Canada)

Alnova

Pharmaceuticals

SA

(Switzerland)

Genius LLC

(Ukraine)

Branch

44% JV 49% JV Branch 50%

Associate

100% Subsidiary

50% Associate 100% Subsidiary 60% Subsidiary

118

BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Board of Directors

The general supervision, direction and management of our Company, its operations and business are vested in the

Board, which exercises its powers subject to the Memorandum of Association and Articles of Association of our

Company and as per the requirements of applicable law. The composition of our Board is governed by the

provisions of the Companies Act, 2013, the Articles of Association of our Company and the SEBI Listing

Regulations. The Articles of Association of our Company provide that the number of directors shall not be less

than three and not more than fifteen. At present, our Company has eight Directors on its Board, comprising four

Executive Directors and four Non-Executive Independent Directors, inclusive of our Executive Chairman and

CEO and one woman Independent Director. Our Board is compliant with the corporate governance requirements

of the SEBI Listing Regulations.

Pursuant to the provisions of the Companies Act, at least two-third of the total number of Directors, excluding

Independent Directors, are liable to retire by rotation, with one-third of such number retiring at each AGM.

Additionally, in accordance with the Articles of Association of our Company, if the number of Directors retiring

is not three or a multiple of three, then the nearest number to one-third are liable to retire by rotation. A retiring

Director is eligible for reappointment. Further, as per the provisions of Companies Act, an Independent Director

may be appointed for a maximum of two consecutive terms of up to five consecutive years each. However, the

reappointment of an Independent Directors for a second consecutive term shall, amongst other things, be on the

basis of the performance evaluation report and approved by the Shareholders by way of a special resolution.

The following table sets forth details regarding the Board of Directors as of the date of this Placement Document:

S.No. Name, Address, Occupation, DIN, Term and

Nationality

Age (in

years) Designation

1. Chirayu Amin

Address:

F-10/195, Race Course Circle,

Gotri Road, Vadodara, Gujarat,

India- 390007

Occupation: Business

DIN: 00242549

Term: For a period of five years with effect from

April 1, 2016 to March 31, 2021

Nationality: Indian

73

Executive Chairman and CEO

2. Pranav Amin

Address:

F-10/195, Race Course Circle,

Gotri Road, Vadodara, Gujarat,

India- 390007

Occupation: Business

DIN: 00245099

Term: For a period of five years with effect from

April 1, 2016 to March 31, 2021

Nationality: Indian

44

Managing Director

119

S.No. Name, Address, Occupation, DIN, Term and

Nationality

Age (in

years) Designation

3. Shaunak Amin

Address:

F-10/195, Race Course Circle,

Gotri Road, Vadodara, Gujarat,

India- 390007

Occupation: Business

DIN: 00245523

Term: For a period of five years with effect from

May 2, 2018 to May 1, 2023

Nationality: Indian

42 Managing Director

4. Raj Kumar Baheti

Address:

B-2-302 Orcadia,

Nautilus Complex,

Off Vasna Road, Vadodara,

Gujarat, India- 390007

Occupation: Service

DIN: 00332079

Term: For a period of five years with effect from

April 1, 2016 to March 31, 2021

Nationality: Indian

60 Director- Finance and Chief

Financial Officer

5. Krishnapuram Ramanathan

Address:

192, Jolly Maker Apartment no. 3,

Cuffe Parade, Colaba,

Mumbai, Maharashtra,

India - 400005

Occupation: Consultant

DIN: 00243928

Term: For a period of five years with effect from

April 1, 2019 to March 31, 2024

Nationality: Indian

81

Independent Director

6. Pranav Parikh

Address:

18 A, Manek, LD Ruparel Marg,

Malabar Hill, Mumbai

Maharashtra, India- 400 006

Occupation: Business

DIN: 00318726

Term: For a period of five years with effect from

April 1, 2019 to March 31, 2024

Nationality: Indian

77 Independent Director

120

S.No. Name, Address, Occupation, DIN, Term and

Nationality

Age (in

years) Designation

7. Paresh Saraiya

Address:

18, Charotar Society,

Old Padra Road, Akota,

Vadodara, Gujarat,

India - 390020

Occupation: Business

DIN: 00063971

Term: For a period of five years with effect from

April 1, 2019 to March 31, 2024

Nationality: Indian

66 Independent Director

8. Archana Hingorani

Address:

701, Orchid Breeze,

7th Floor 16th Road,

Opposite Khar Gymkhana Ground Khar,

Mumbai, Maharashtra,

India– 400 052

Occupation: Business

DIN: 00028037

Term: For a period of five years with effect from

February 4, 2020 to February 3, 2025

Nationality: Indian

54 Independent Director

Biographies of the Directors

Chirayu Amin is the Executive Chairman and CEO of our Company. He has been a Director in our Company

since 2010. He holds a bachelor’s degree in science from Maharaja Sayajirao University of Baroda, and a master’s

degree in business administration from Seton Hall University, New Jersey, USA. He is currently associated as

trustee with Bhailal Amin General Hospital, Uday Education Society, and Bal Utkarsh Society. He also serves as

a director on the boards of Alembic Limited, Shreno Limited, Elecon Engineering Company Limited, Nirayu

Limited and Paushak Limited.

Pranav Amin is the Managing Director of our Company and heads our International Business Unit. He has been

a Director in our Company since 2011 and was appointed as a joint managing director in 2015 and thereafter

Managing Director in April 2016. He also serves as a director on the board of Incozen Therapeutics Private

Limited.

Shaunak Amin is the Managing Director of our Company and heads the branded formulation business of our

Company. He has been a Director in our Company since 2013. He also serves as a director on the boards of Shreno

Limited and Incozen Therapeutics Private Limited.

Raj Kumar Baheti is the Director- Finance and Chief Financial Officer of our Company. He has been a Director

in our Company since 2010. He is a fellow member of the Institute of Chartered Accountants of India and the

Institute of Company Secretaries of India. He has prior experience in finance, accounts, tax and management. He

also serves as a director on the board of Aleor Dermaceuticals Limited.

Krishnapuram Ramanathan is an Independent Director of our Company. He has been a Director in our Company

since 2011. He holds a bachelor’s degree in science from the University of Madras. He has served as an officer in

121

the Indian Administrative Services, Government of India, having been associated in various positions. He was

also earlier the chairman and managing director of Indian Petrochemicals Corporation Limited. He is also the

president of the governing council of the Indian Centre for Plastics in the Environment.

Pranav Parikh is an Independent Director of our Company. He has been a Director in our Company since 2011.

He is the chairman and managing director of Technova Imaging Systems Private Limited. He also serves as a

director on the boards of Lee and Muirhead Private Limited, Shree Luxmi Woollen Mills Estate Private Limited,

Technova Graphics Private Limited and Technova Prepress Solutions Private Limited.

Paresh Saraiya is an Independent Director of our Company. He has been a Director in our Company since 2011.

He holds a bachelor’s degree in mechanical engineering from the Maharaja Sayajirao University of Baroda. He

has earlier been associated with Transpek Industry Limited, subsequent to which he assumed charge as the

executive director of Transpek-Silox Industry Private Limited. He has also held the position of senior vice

president of Federation of Gujarat Industries (FGI) – Vadodara. He also serves as a director on the boards of

Transpek Silox Industry Private Limited, Shroffs Engineering Limited, Excel Genetics Limited, Dinesh Remedies

Limited, Technokraft Products Private Limited, SIAMP India Private Limited, Aatapi Seva Foundation and

Vantage Chemical Industries Private Limited.

Archana Hingorani is an Independent Director of our Company. She has been a Director in our Company since

2015. She holds a bachelor’s degree in economics from St. Xavier’s College, University of Mumbai, a master’s

degree in business administration from The Graduate School of Business, University of Pittsburg and a Ph.D from

Joseph M. Katz Graduate School of Business, University of Pittsburgh, USA. She is, currently, the managing

partner at Siana Capital Management LLP. She also serves as a director on the boards of Den Networks Limited,

5Paisa Capital Limited, SIDBI Venture Capital Limited, Grindwell Norton Limited and SBI Mutual Fund Trustee

Company Private Limited.

Relationship between Directors

Except as disclosed below, none of the Directors of our Company are related to each other:

(i) Chirayu Amin and Pranav Amin are related to each other as father and son;

(ii) Chirayu Amin and Shaunak Amin are related to each other as father and son; and

(iii) Pranav Amin and Shaunak Amin are related to each other as brothers.

Borrowing powers of the Board

In accordance with the Articles of Association and subject to the provisions of the Companies Act, the Board may,

from time to time, by a resolution passed at a meeting of the Board, accept deposits from members of our Company

either in advance on calls or otherwise and generally to raise or borrow or secure the repayment of any sum of

money for any purpose. Pursuant to a resolution of the Shareholders dated July 27, 2018, which allowed the Board

to borrow money for an amount not exceeding ` 2,500 crore and a subsequent resolution of the Board dated

September 10, 2018, the Board delegated authority to the Executive Directors to borrow monies for an amount

not exceeding ` 1,500 crore.

Shareholding of Directors

The following table sets forth details regarding the shareholding of the Directors as of the date of this Placement Document:

Name of the Director Number of Equity Shares held Percent of the issued and paid-up

Equity Share capital (in %)

Chirayu Amin* 45,21,465 2.40

Pranav Amin 10,09,800 0.54

Shaunak Amin 10,06,980 0.53

Raj Kumar Baheti Nil Nil

Krishnapuram Ramanathan Nil Nil

Pranav Parikh^ 19,410 0.01

Paresh Saraiya^ 4,824 0.00

122

Name of the Director Number of Equity Shares held Percent of the issued and paid-up

Equity Share capital (in %)

Archana Hingorani Nil Nil

* Including 10,73,250 Equity Shares held in the representatives capacity of Karta of Chirayu Ramanbhai Amin HUF.

^ Jointly with immediate relatives.

Remuneration of the Directors

In accordance with applicable laws, our Company pays a sitting fee of ₹ 60,000 per meeting of the Board, ₹ 30,000 per meeting of the Audit Committee and ₹ 10,000 for other committee meetings, to each of our Non-Executive Directors.

The following table sets forth the remuneration (including sitting fees, commission and perquisites) paid by or

provided for our Company to the Directors during the last three Fiscals and the three month period ended June

30, 2020: (In ₹ crore)

Executive Directors

Chirayu Amin, Executive Chairman & CEO

Chirayu Amin was appointed as an Executive Chairman and CEO of our Company pursuant to a resolution

passed by the Shareholders of our Company on July 29, 2016, for a period of five years commencing from

April 1, 2016.

Set out hereunder are the details of the terms and conditions of appointment (including remuneration) of

Chirayu Amin, which are subject from to time, to internal policies and decisions of the Board and the

Shareholders:

Terms and Conditions of Appointment

Particulars Date/Remuneration/Details

Period With effect from April 1, 2016 for a period of five years i.e., up to March 31, 2021.

Basic salary Maximum cost to company of ₹ 12 crore per annum with effect from April 1, 2016

Perquisites:

(i) Company leased housing accommodation or house rent allowance; (ii) Leave travel concession for self and family; (iii)

Medical reimbursement, medical insurance and personal accident insurance; (iv) Conveyance; (v) Free telephone facility

at the residence; (vi) Contribution to provident fund, superannuation fund and gratuity fund; and (vii) Other perquisites,

allowances, benefits and amenities as per the service rules of our Company.

All of the above as per the rules of our Company as applicable from time to time.

Commission

In addition to salary, perquisites, allowances and others, commission calculated with reference to net profits of our

Company in a particular financial year, as may be determined by the Board of Directors at the end of each Fiscal or a part

of the year, subject to overall ceilings stipulated in Section 197 of the Companies Act.

Total Remuneration

The total remuneration including commission, payable to Chirayu Amin as Executive Director shall not exceed 8% of the

net profit of our Company for the relevant Fiscal.

Name Between April 1, 2020 to

June 30, 2020 Fiscal 2020 Fiscal 2019 Fiscal 2018

Chirayu Amin 6.62 26.50 25.50 22.00

Pranav Amin 5.12 19.50 17.45 15.65

Shaunak Amin 5.12 19.50 17.45 15.66

Raj Kumar Baheti 1.17 4.09 3.65 3.35

Krishnapuram Ramanathan 0.02 0.15 0.14 0.11

Pranav Parikh 0.02 0.15 0.13 0.11

Paresh Saraiya 0.02 0.16 0.14 0.12

Archana Hingorani 0.02 0.14 0.14 0.11

123

Pranav Amin, Managing Director

Pranav Amin was appointed as a Managing Director of our Company pursuant to a resolution passed by the

Shareholders of our Company on July 29, 2016, for a period of five years commencing from April 1, 2016.

Set out hereunder are the details of the terms and conditions of appointment (including remuneration) of Pranav

Amin:

Terms and Conditions of Appointment

Particulars Date/Remuneration/Details

Period With effect from April 1, 2016 for a period of five years i.e., up to March 31, 2021.

Basic salary Maximum cost to company of ₹ 18 crore per annum with effect from April 1, 2018

Perquisites

(i) Company leased housing accommodation or house rent allowance; (ii) Leave travel concession for self and family; (iii)

Medical reimbursement, medical insurance and personal accident insurance; (iv) Conveyance; (v) Free telephone facility

at the residence; (vi) Contribution to provident fund, superannuation fund and gratuity fund; and (vii) Other perquisites,

allowances, benefits and amenities as per the service rules of our Company.

All of the above as per the rules of our Company as applicable from time to time.

Commission

In addition to salary, perquisites, allowances and others, Commission calculated with reference to net profits of our

Company in a particular Fiscal, as may be determined by the Board of Directors at the end of each Fiscal, not exceeding

1% of the net profits of our Company for the respective Fiscal, subject to overall ceilings stipulated in Section 197 of the

Companies Act.

Shaunak Amin, Managing Director

Shaunak Amin was appointed as a Managing Director of our Company pursuant to a resolution passed by the

Shareholders on July 27, 2018, for a period of five years, commencing from May 2, 2018. Set out hereunder are

the details of the terms and conditions of appointment (including remuneration) of Shaunak Amin:

Terms and Conditions of Appointment

Particulars Date/Remuneration/Details

Period With effect from May 2, 2018 for a period of five years i.e., up to May 1, 2023.

Basic salary Maximum cost to company of ₹ 18 crore per annum with effect from May, 2, 2018

Perquisites

(i) Company leased housing accommodation or house rent allowance; (ii) Leave travel concession for self and family; (iii)

Medical reimbursement, medical insurance and personal accident insurance; (iv) Conveyance; (v) Free telephone facility

at the residence; (vi) Contribution to provident fund, superannuation fund and gratuity fund; and (vii) Other perquisites,

allowances, benefits and amenities as per the service rules of our Company.

All of the above as per the rules of our Company as applicable from time to time.

Commission

In addition to salary, perquisites, allowances and others, Commission calculated with reference to net profits of our

Company in a particular Fiscal, as may be determined by the Board of Directors at the end of each Fiscal, not exceeding

1% of the net profits of our Company for the respective Fiscal, subject to overall ceilings stipulated in Section 197 of the

Companies Act.

Raj Kumar Baheti, Director- Finance and Chief Financial Officer

Raj Kumar Baheti was appointed as a Director- Finance and Chief Financial Officer of our Company pursuant

to a resolution passed by the Shareholders of our Company on July 29, 2016, for a period of five years

commencing from April 1, 2016.

124

Set out hereunder are the details of the terms and conditions of appointment (including remuneration) of Raj

Kumar Baheti:

Terms and Conditions of Appointment

Particulars Date/Remuneration/Details

Period With effect from April 1, 2016 for a period of five years i.e., up to March 31, 2021.

Basic salary Maximum cost to company of ₹5 crore per annum with effect from April 1, 2016

Perquisites

(i) Company leased housing accommodation or house rent allowance; (ii) Leave travel concession for self and family; (iii)

Medical reimbursement, medical insurance and personal accident insurance; (iv) Conveyance; (v) Free telephone facility

at the residence; (vi) Contribution to provident fund, superannuation fund and gratuity fund; and (vii) Other perquisites,

allowances, benefits and amenities as per the service rules of our Company.

All of the above as per the rules of our Company as applicable from time to time.

Key Management Personnel

The following are the KMPs of our Company, in addition to our Executive Chairman and CEO, Managing

Directors and Director – Finance and Chief Financial Officer:

Charandeep Singh Saluja is the Company Secretary and Compliance Officer of our Company. He holds a

bachelor’s degree in commerce and a post graduate diploma in taxation laws and practice from Maharaja Sayajirao

University, Baroda. He is an associate member of the Institute of Company Secretaries of India. He has significant

experience in compliance functions, including eight years at the Alembic group of companies. He has been

associated with our Company since June 1, 2018. He also has experience in corporate secretarial and corporate

restructuring functions.

Relationship of Key Management Personnel

Except as disclosed in “Relationship between Directors” on page 121, none of the other KMPs of our Company

are related to each other.

Shareholding of Key Management Personnel

Other than as disclosed above in “Shareholding of Directors”, none of our other KMPs hold any Equity Shares in the

Company.

Interest of our Directors and Key Management Personnel

Except as stated in “Related Party Transactions” on page 71, and to the extent of respective shareholding,

remuneration including commission received on net profit, reimbursement of expenses and other benefits to which

they are entitled as per their respective terms and conditions of appointment, our Directors and KMPs do not have

any other interest in our Company or its business. Our Directors and KMPs may also be deemed to be interested

to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares, held by

them, any other benefit arising out of such holding and transactions with the companies with which they are

associated as directors or members. Our Non-Executive Directors and Independent Directors may also be deemed

to be interested to the extent of sitting fees payable to them for attending meetings of our Board or a committee

thereof as well as to the extent of commission and reimbursement of expenses payable to them.

Other than as disclosed in this Placement Document, there are no outstanding transactions other than in the

ordinary course of business undertaken by our Company in which the Directors and KMPs are interested parties.

Certain of our Directors and KMPs may also be regarded as interested in the Equity Shares held by, or

subscribed by and allotted to, the companies, firms and trusts, in which they are interested as directors, members,

partners or trustees.

Except as otherwise stated in this Placement Document, our Company has not entered into any contract,

agreement or arrangement during the preceding two years from the date of this Placement Document in which

any of the Directors and KMPs are interested, directly or indirectly, and no payments have been made to them

in respect of any such contracts, agreements, arrangements which are proposed to be made with them.

125

Further, our Company has neither availed of any loans from, nor extended any loans to the Directors and KMPs

which are currently outstanding.

Our Company has entered into an agreement with our Promoter, Alembic Limited, for purchase of land. Our

Executive Chairman and CEO is indirectly interested in this transaction by way of being a chairman on the

board of directors of both the companies.

Corporate governance

The Board of Directors presently consists of eight Directors. In compliance with the requirements of the SEBI

Listing Regulations, the Board of Directors has four Independent Directors. Our Company is in compliance with

the corporate governance requirements including the constitution of Board and committees thereof, as prescribed

under the SEBI Listing Regulations.

Committees of the Board of Directors

The Board of Directors have constituted committees, in accordance with the relevant provisions of the Companies

Act and the SEBI Listing Regulations.

The following table sets forth the members of the aforesaid committees as of the date of this Placement Document:

Committee Members

Audit Committee • Chairman: Paresh Saraiya

• Krishnapuram Ramanathan

• Pranav Parikh

• Archana Hingorani

Nomination and Remuneration Committee • Chairman: Krishnapuram Ramanathan

• Chirayu Amin

• Pranav Parikh

• Paresh Saraiya

Stakeholders’ Relationship Committee • Chairman: Paresh Saraiya

• Raj Kumar Baheti

• Pranav Amin

Risk Management Committee • Chairman: Paresh Saraiya

• Pranav Amin

• Raj Kumar Baheti

• Vinod Kamath

• Shreekumar Nair

Corporate Social Responsibility

Committee

• Chairman: Chirayu Amin

• Krishnapuram Ramanathan

• Paresh Saraiya

Senior Management Personnel

Our Senior Management Personnel as of the date of this Placement Document, are as follows:

Ajay Desai is the senior vice president, business finance of our Company. He holds a bachelor’s degree in

commerce from the University of Calcutta. He is a chartered accountant from the Institute of Chartered

Accountants of India, a company secretary from the Institute of Company Secretaries of India, a management

accountant from the Chartered Institute of Management Accountants and an associate of the Institute of Cost and

Works Accountants of India. He has been associated with the Alembic group of companies since September 29,

2008 and with our Company since April 1, 2011.

Chandrahas Shetty is the senior vice president, human resources of our Company. He holds a bachelor’s degree

in arts from Sri Bhuvanendra College, Karkala and a master’s degree in personnel management from Bharati

Institute of Management, Pune, University of Pune. Additionally, he holds a diploma in management studies from

Kishinchand Chellaram College, University of Mumbai and a diploma in personnel management from the Tata

Institute of Social Sciences. He has been associated with the Alembic group of companies since December 11,

126

2006 and with our Company since April 1, 2011.

Craig Salmon is the president of the U.S operations of our Company. He holds a bachelor’s degree in business

management and economics from the North Carolina State University, U.S.A. He has been associated with our

Company since May 26, 2015.

Jesal Shah is head, strategy of our Company. He holds a master’s degree in management studies from the

Sydenham Institute of Management Studies, Research and Entrepreneurship Education, University of Bombay.

He has previously been associated with JM Financial Institutional Securities Private Limited as the head of

research (executive director) in its research department. He has been associated with our Company since July 29,

2013.

Mitanshu Shah is the head, IBU finance of our Company. He holds a bachelor’s degree in commerce from the

Maharaja Sayajirao University, Baroda. He is also a cost and management accountant from the Institute of Cost

and Works Accountants of India. He has previously been associated with LK India Private Limited in the capacity

of head of finance and legal. He has been associated with the Alembic group of companies since May 8, 2006 and

with our Company since April 1, 2011.

Dr. Petla Y Naidu is the head, research and development (sterile formulations) of our Company. He holds a

master’s degree in science and a PhD. from the Andhra University. He has previously been associated with

Hospira Healthcare India Private Limited as senior vice president of manufacturing science and technology. He

has been associated with our Company since April 9, 2016.

Dr. Pankaj Kumar Khapra is the head, research and development (formulations and clinical affairs) of our

Company. He holds a master’s degree in pharmacy from the Doctor Harisingh Gour Vishwavidyalaya, Sagar,

Madhya Pradesh and a Ph.D. in pharmaceutics from the University of Indore. He has previously been associated

with Abdi Ibrahim Pharmaceuticals. He has been associated with our Company since January 24, 2013.

Shreekumar Nair is the senior vice president (supply chain management and operations) of our Company. He

holds a bachelor’s degree in science from the University of Bombay and a diploma in materials management from

the Ghatkopar Institute of Management, Mumbai. He has been associated with the Alembic group of companies

since October 12, 2009 and with our Company since April 1, 2011.

Vinod Kamath is the head, technical operations of our Company. He holds a bachelor’s degree in technology in

mechanical engineering from the Indian Institute of Technology, Madras and a post graduate diploma in

management from the Indian Institute of Management, Bangalore. He has been associated with our Company

since February 14, 2014.

Vittal T.V.S.K is the head, research and development (API) of our Company. He holds a master’s degree in science

in chemistry from the University of Hyderabad and a Ph.D in chemistry from Osmania University, Hyderabad.

He has previously been associated with Solara Active Pharma Sciences Limited as senior vice president (research

and development). He has been associated with our Company since July 23, 2018.

Other confirmations

None of the Directors, Promoters or Key Management Personnel of our Company has any financial or other

material interest in the Issue.

Our Company does not have any bonus or profit-sharing plan with its Directors or Key Management Personnel.

None of the Directors or the companies with which they are or were associated as promoters, directors are debarred

from accessing the capital markets under any order or direction passed by the SEBI or any other governmental

authority. Neither our Company, nor our Promoters or the companies with which our Promoters is or has been

associated with a promoter or a person in control have been debarred from accessing capital markets under any

order or direction passed by SEBI or any other governmental authority.

Neither our Company, nor any of our Directors or Promoters have been declared as a Wilful Defaulter in the last

ten years.

None of our Directors or Promoters have been declared as a Fugitive Economic Offender.

127

Employee Stock Option Schemes

The Company does not have any employee stock option schemes.

Related Party Transactions

For details in relation to the related party transactions entered by our Company during the last three Fiscals

immediately preceding the date of this Placement Document, please see the section "Related Party Transactions”

on page 71.

128

PRINCIPAL SHAREHOLDERS AND OTHER INFORMATION

The following tables present information regarding the ownership of Equity Shares by the Shareholders as of June 30, 2020:

Summary statement showing the shareholding pattern of our Company

Category of shareholder Nos. of

shareholders

No. of fully paid up

equity shares held

Total nos.

shares held

Shareholding as a % of total no.

of shares (calculated as per

SCRR, 1957) As a % of

(A+B+C2)

No. of Voting

Rights

Total as a % of

Total Voting right

Number of equity shares

held in dematerialized

form

(A) Promoter & Promoter Group 26 13,75,59,973 13,75,59,973 72.97 13,75,59,973 72.97 13,75,59,973

(B) Public 64,344 5,09,55,941 5,09,55,941 27.03 5,09,55,941 27.03 4,90,69,600

(C) Non Promoter- Non Public - - - 0.00 - 0.00 -

(C1) Shares underlying DRs - - - 0.00 - 0.00 -

(C2) Shares held by Employee Trusts - - - 0.00 - 0.00 -

Total 64,370 18,85,15,914 18,85,15,914 100.00 18,85,15,914 100.00 18,66,29,573

Statement showing shareholding pattern of the Promoter and Promoter Group

Category of shareholder Nos. of shareholders No. of fully paid up

equity shares held Total nos. shares held

Shareholding as a % of

total no. of shares

(calculated as per SCRR,

1957)As a % of (A+B+C2)

Number of equity shares held

in dematerialized form

A1) Indian

Individuals / Hindu Undivided Family 10 96,64,175 96,64,175 5.13 96,64,175

Chirayu Ramanbhai Amin* 1 45,21,465 45,21,465 2.40 45,21,465

Malika Chirayu Amin 1 30,05,730 30,05,730 1.59 30,05,730

Pranav Chirayu Amin 1 10,09,800 10,09,800 0.54 10,09,800

Shaunak Chirayu Amin 1 10,06,980 10,06,980 0.53 10,06,980

Inaaya Shaunak Amin 1 30,000 30,000 0.02 30,000

Naintara Shaunak Amin 1 30,000 30,000 0.02 30,000

Ranvir Pranav Amin 1 30,000 30,000 0.02 30,000

Samira Pranav Amin 1 30,000 30,000 0.02 30,000

Barkha Pranav Amin 1 100 100 0.00 100

Krupa Shaunak Amin 1 100 100 0.00 100

Any Other (Specify) 15 12,68,88,818 12,68,88,818 67.31 12,68,88,818

Alembic Limited 1 5,55,51,528 5,55,51,528 29.47 5,55,51,528

Shreno Ltd 1 100 100 0.00 100

Nirayu Limited 1 7,00,35,435 7,00,35,435 37.15 7,00,35,435

Paushak Limited 1 855 855 0.00 855

Alembic City Limited 1 100 100 0.00 100

Shreno Publications Limited 1 100 100 0.00 100

129

Category of shareholder Nos. of shareholders No. of fully paid up

equity shares held Total nos. shares held

Shareholding as a % of

total no. of shares

(calculated as per SCRR,

1957)As a % of (A+B+C2)

Number of equity shares held

in dematerialized form

Vidyanidhi Trust - - - 0.00 -

Arogyavardhini Society - - - 0.00 -

Utkarsh Vidyakendra - - - 0.00 -

Ujjwal Vidyalaya - - - 0.00 -

Bhailal Amin General Hospital 1 2,80,950 2,80,950 0.15 2,80,950

Uday Education Society 1 10,18,050 10,18,050 0.54 10,18,050

Laburnum Family Trust 1 200 200 0.00 200

Virsad Family Trust 1 200 200 0.00 200

Laksh Trust 1 100 100 0.00 100

Gallup Trust 1 100 100 0.00 100

Grace Star Trust 1 100 100 0.00 100

Satori Trust 1 100 100 0.00 100

Viramya Packlight LLP 1 900 900 0.00 900

Sub Total A1 25 13,65,52,993 13,65,52,993 72.44 13,65,52,993

A2) Foreign 0.00

Individuals (NonResident Individuals/ Foreign

Individuals)

1 10,06,980 10,06,980 0.53 10,06,980

Udit Chirayu Amin 1 10,06,980 10,06,980 0.53 10,06,980

Tishya Udit Amin - - - 0.00 -

Sub Total A2 1 10,06,980 10,06,980 0.53 10,06,980

A=A1+A2 26 13,75,59,973 13,75,59,973 72.97 13,75,59,973

* Including 10,73,250 Equity Shares held in the representatives capacity of Karta of Chirayu Ramanbhai Amin HUF.

Statement showing shareholding pattern of the public shareholder*

Category & Name of the Shareholders No. of

shareholder

No. of fully paid up

equity shares held

Total no. shares

held

Shareholding %

calculated as per

SCRR, 1957 As a

% of (A+B+C2)

No of Voting

Rights

Total as a %

of Total

Voting right

Number of equity

shares held in

dematerialized form

(Not Applicable)

B1) Institutions

Mutual Funds/ 18 93,88,836 93,88,836 4.98 93,88,836 4.98 93,88,836

DSP Midcap Fund 1 40,47,376 40,47,376 2.15 40,47,376 2.15 40,47,376

Alternate Investment Funds 6 1,44,924 1,44,924 0.08 1,44,924 0.08 1,44,924

Foreign Portfolio Investors 189 1,37,57,436 1,37,57,436 7.30 1,37,57,436 7.30 1,37,57,436

Elara India Opportunities Fund Limited 1 19,42,662 19,42,662 1.03 19,42,662 1.03 19,42,662

Financial Institutions/ Banks 10 2,19,085 2,19,085 0.12 2,19,085 0.12 2,03,985

Insurance Companies 3 36,27,157 36,27,157 1.92 36,27,157 1.92 36,27,157

HDFC Life Insurance Company Limited 1 25,62,157 25,62,157 1.36 25,62,157 1.36 25,62,157

Any Other (specify) 1 3,250 3,250 0.00 3,250 0.00 3,250

130

Category & Name of the Shareholders No. of

shareholder

No. of fully paid up

equity shares held

Total no. shares

held

Shareholding %

calculated as per

SCRR, 1957 As a

% of (A+B+C2)

No of Voting

Rights

Total as a %

of Total

Voting right

Number of equity

shares held in

dematerialized form

(Not Applicable)

Foreign Bank 1 3,250 3,250 0.00 3,250 0.00 3,250

Sub Total B1 227 2,71,40,688 2,71,40,688 14.40 2,71,40,688 14.40 2,71,25,588

B2) Central Government/ State Government(s)/

President of India

- - - 0.00 - 0.00 -

B3) Non-Institutions

Individual share capital upto Rs. 2 Lacs 60,635 1,56,92,973 1,56,92,973 8.32 1,56,92,973 8.32 1,38,35,257

Individual share capital in excess of Rs. 2 Lacs 13 47,30,595 47,30,595 2.51 47,30,595 2.51 47,30,595

NBFCs registered with RBI 3 1,235 1,235 0.00 1,235 0.00 1,235

Any Other (specify) 3,466 33,90,450 33,90,450 1.80 33,90,450 1.80 33,76,925

Trusts 8 9,299 9,299 0.00 9,299 0.00 6,449

HUF 1,137 5,67,156 5,67,156 0.30 5,67,156 0.30 5,67,156

Non-Resident Indian (NRI) 1,701 5,73,371 5,73,371 0.30 5,73,371 0.30 5,72,696

Unclaimed Suspense Account* 1 1,46,993 1,46,993 0.08 1,46,993 0.08 1,46,993

IEPF 1 10,99,859 10,99,859 0.58 10,99,859 0.58 10,99,859

Clearing Members 159 1,54,862 1,54,862 0.08 1,54,862 0.08 1,54,862

Bodies Corporate 458 8,38,810 8,38,810 0.44 8,38,810 0.44 8,28,810

Foreign Portfolio Investor (Category - III) 1 100 100 0.00 100 0.00 100

Sub Total B3 64,117 2,38,15,253 2,38,15,253 12.63 2,38,15,253 12.63 2,19,44,012

B=B1+B2+B3 64,344 5,09,55,941 5,09,55,941 27.03 5,09,55,941 27.03 4,90,69,600

*As on 30th June, 2020 there are 321 shareholders whose equity shares are lying in Unclaimed Suspense Account and hence remain unclaimed.

Statement showing shareholding pattern of the Non Promoter- Non Public shareholder

Category & Name of the Shareholders (I) No. of

shareholder (III)

No. of fully paid up

equity shares held

(IV)

Total No. shares held

(VII = IV+V+VI)

Shareholding % calculated as per

SCRR, 1957 As a % of (A+B+C2)(VIII)

Number of equity shares held in

dematerialized form (XIV)(Not

Applicable)

C1) Custodian/DR Holder - - - 0.00 -

C2) Employee Benefit Trust - - - 0.00 -

Details of disclosure made by the trading members holding 1% or more of the total number of shares of the Company

Name of the Trading Member Name of the Beneficial Owner No. of shares held % of total no. of shares Date of reporting by the Trading Member

Nil Nil Nil Nil Nil

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ISSUE PROCEDURE

The following is a summary intended to present a general outline of the procedure relating to the application,

payment of Bid Amount, Allocation and Allotment of the Equity Shares. The procedure followed in the Issue may

differ from the one mentioned below and investors are assumed to have apprised themselves of the same from our

Company or the BRLMs. Prospective Investors are advised to inform themselves of any restrictions or limitations

that may be applicable to them. Also see “Selling Restrictions” and “Purchaser Representations and Transfer

Restrictions” on pages 145 and 152, respectively.

Our Company, the BRLMs and their respective directors, officers, agents, advisors, shareholders, employees,

counsel, affiliates and representatives are not liable for any amendment or modification or change to applicable

laws or regulations, which may occur after the date of this Placement Document. Eligible QIBs are advised to

make their independent investigations and satisfy themselves that they are eligible to apply. Eligible QIBs are

advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of

Equity Shares that can be held by them under applicable law or regulation or as specified in this Placement

Document. Further, Eligible QIBs are required to satisfy themselves that their Bids would not result in triggering

an open offer under the SEBI Takeover Regulations and shall be solely responsible for compliance with all the

applicable provisions of the SEBI Takeover Regulations, the SEBI Insider Trading Regulations, and other

applicable laws.

Qualified Institutions Placement

THE ISSUE IS MEANT ONLY FOR ELIGIBLE QIBs ON A PRIVATE PLACEMENT BASIS AND IS

NOT AN OFFER TO THE PUBLIC OR TO ANY OTHER CLASS OF INVESTORS.

The Preliminary Placement Document and this Placement Document has not been, and will not be, filed as a

prospectus with the RoC and, no Equity Shares will be offered in India or overseas to the public or any members

of the public or any other class of investors, other than Eligible QIBs.

The Issue is being made to Eligible QIBs in reliance upon Chapter VI of the SEBI Regulations and Section 42

and other applicable provisions of the Companies Act, through the mechanism of a QIP. Under Chapter VI of the

SEBI Regulations and Section 42 of the Companies Act and other applicable provisions of the Companies Act, a

company may issue equity shares to Eligible QIBs provided that certain conditions are met.

Some of these conditions are set out below:

• the shareholders of the issuer have passed a special resolution approving such QIP. Such special resolution

must inter alia specify that, (a) the allotment of securities is proposed to be made pursuant to the QIP; and

(b) the “relevant date”;

• the explanatory statement to the notice to the shareholders for convening the general meeting must disclose,

among other things, the particulars of the issue including the date of passing the board resolution, the kind

of securities being offered and the price at which they are offered, amount which the company intends to

raise by way of such securities and the material terms of raising such securities, proposed issue schedule,

the purpose or objects of offer, the contribution made by the promoters or directors either as part of the

offer or separately in furtherance of the objects, and the basis or justification for the price (including

premium, if any) at which the offer or invitation is being made;

• under Regulation 172(1)(b) of the SEBI Regulations, equity shares of the same class of such issuer, which

are proposed to be allotted through the QIP, are listed on a recognised stock exchange in India having

nation-wide trading terminals for a period of at least one year prior to the date of issuance of notice to its

shareholders for convening the meeting to seek approval of the shareholders for the above-mentioned

special resolution;

• invitation to apply in the QIP must be made through a private placement offer-cum-application form serially

numbered and addressed specifically to the Eligible QIBs to whom the QIP is made either in writing or in

electronic mode, within 30 days of recording the name of such person in accordance with applicable law;

the issuer shall have completed allotments with respect to any earlier offer or invitation made by the issuer

or shall have withdrawn or abandoned such invitation or offer made by the issuer, except as permitted under

the Companies Act;

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• the issuer shall not make any subsequent qualified institutions placement until the expiry of two weeks

from the date of the qualified institutions placement; and

• the promoters and directors of the issuer shall not be Fugitive Economic Offenders.

At least 10% of the equity shares issued to Eligible QIBs shall be available for Allocation to Mutual Funds,

provided that, if this portion, or any part thereof to be allotted to Mutual Funds remains unsubscribed, it may be

allotted to other Eligible QIBs.

Bidders are not allowed to withdraw or revise downwards their Bids after the Bid/ Issue Closing Date.

Additionally, there is a minimum pricing requirement under the SEBI Regulations. The floor price of the equity

shares issued under the QIP shall not be less than the average of the weekly high and low of the closing prices of

the issuer’s equity shares of the same class quoted on the stock exchanges during the two weeks preceding the

relevant date as calculated in accordance with Chapter VI of the SEBI Regulations. Our Company has also offered a

discount of ₹ 48.75 per Equity Share (4.97% on the Floor Price), in accordance with and in terms of Regulation 176 of the

SEBI Regulations.

The “relevant date” in case of allotment of equity shares, refers to the date of the meeting in which the board of

directors or the committee of directors duly authorised by the board of the issuer decides to open the proposed

issue and “stock exchange” means any of the recognised stock exchanges in India on which the equity shares of

the issuer of the same class are listed and on which the highest trading volume in such shares has been recorded

during the two weeks immediately preceding the relevant date.

The securities must be allotted within 365 days from the date of the shareholders’ resolution approving the QIP

and also within 60 days from the date of receipt of subscription money from the relevant Eligible QIBs.

The Equity Shares to be issued pursuant to the Issue must be issued on the basis of the Preliminary Placement

Document and this Placement Document, that shall contain all material information including the information

specified in Schedule VII of the SEBI Regulations and the requirements prescribed under PAS Rules and Form

PAS-4. The Preliminary Placement Document and this Placement Document are private documents provided to

only select Eligible QIBs through serially numbered copies and are required to be placed on the website of the

concerned Stock Exchanges and of our Company with a disclaimer to the effect that it is in connection with an

issue to Eligible QIBs and no offer is being made to the public or to any other category of investors. Please note

that if you have not receive a serially numbered copy of the Preliminary Placement Document and this Placement

Document addressed to you, you may not rely on the Preliminary Placement Document or this Placement

Document uploaded on the website of the Stock Exchanges or our Company for making an application to subscribe

to Equity Shares pursuant to the Issue.

The minimum number of allottees for each QIP shall not be less than:

• two, where the issue size is less than or equal to ₹250 crore; and

• five, where the issue size is greater than ₹250 crore.

No single Allottee shall be Allotted more than 50% of the Issue Size.

Eligible QIBs that belong to the same group or that are under common control shall be deemed to be a single

Allottee for the purpose of the Issue. For details of what constitutes “same group” or “common control”, see “—

Bid Process—Application Form” on page 137.

Equity Shares being Allotted pursuant to the Issue shall not be sold for a period of one year from the date of

Allotment, except on the floor of a recognised stock exchange.

We have applied for and received the in-principle approval of the Stock Exchanges under Regulation 28(1)(a) of

the SEBI Listing Regulations for listing of the Equity Shares to be issued pursuant to the Issue on the Stock

Exchanges. We have filed a copy of the Preliminary Placement Document and this Placement Document with the

Stock Exchanges.

We shall also make the requisite filings with the RoC within the stipulated period as required under the Companies

Act and the PAS Rules.

133

The Issue has been authorised and approved by our Board pursuant to its resolution(s) passed on May 22, 2020

and July 27, 2020 and our Shareholders’ through a special resolution passed on July 22, 2020.

Allotments made to VCFs and AIFs in the Issue are subject to the rules and regulations that are applicable

to each of them respectively, including in relation to lock-in requirement. VCFs and AIFs should

independently consult their own counsel and advisors as to investment in and related matters concerning

the Issue.

The Equity Shares offered in the Issue have not been and will not be registered under the U.S. Securities

Act, or the securities laws of any state of the United States and may not be offered or sold in the United

States except pursuant to an exemption from, or in a transaction not subject to, the registration

requirements of the U.S. Securities Act and any applicable state securities laws. The Equity Shares offered

in the Issue are being offered and sold only outside the United States in “offshore transactions”, as defined

in and in reliance on Regulation S under the U.S. Securities Act. (“Regulation S”). See “Selling Restrictions”

on page 145 for information about eligible offerees for the Issue and “Purchaser Representations and

Transfer Restrictions” on page 152 for information about transfer restrictions that apply to the Equity

Shares sold in the Issue. For a description of certain restrictions on transfer of the Equity Shares, see

“Purchaser Representations and Transfer Restrictions” on page 152.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other

jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such

jurisdiction, except in compliance with the applicable laws of such jurisdiction.

Issue Procedure

1. On Bid / Issue Opening Date, our Company and/or the BRLMs have circulated serially numbered copies

of the Preliminary Placement Document cum Application Form, either in electronic or physical form to the

identified Eligible QIBs and the Application Form will be specifically addressed to such Eligible QIBs. In

terms of Section 42(3) of the Companies Act, our Company shall maintain complete records of Eligible

QIBs in the form and manner prescribed under the PAS Rules, to whom the serially numbered copies of

the Preliminary Placement Document, this Placement Document and the serially numbered Application

Form have been dispatched. Our Company will make the requisite filings with RoC within the stipulated

time period as required under the Companies Act in relation to the Issue.

2. The list of QIBs to whom the Preliminary Placement Document cum Application Form have been

delivered, have been determined by our Company in consultation with the BRLMs, at their sole discretion.

Unless a serially numbered Preliminary Placement Document along with the serially numbered

Application Form, which includes the details of the bank account wherein the Bid Amount is to be

deposited, is addressed to a particular Eligible QIB, no invitation to subscribe shall be deemed to

have been made to such Eligible QIB. Even if such documentation were to come into the possession of

any person other than the intended recipient, no offer or invitation to offer shall be deemed to have been

made to such person and any application that does not comply with this requirement shall be treated as

invalid.

3. The Application Form may be signed physically or digitally, if required under applicable law in the relevant

jurisdiction applicable to each Eligible QIB and as permitted under such applicable law. An Eligible QIB

may submit an unsigned copy of the Application Form, as long as the Bid Amount is paid along with

submission of the Application Form within the Bid/Issue Period. Once a duly filled Application Form is

submitted by an Eligible QIB, whether signed or not, and the Bid Amount has been transferred to the

Escrow Account, such Application Form constitutes an irrevocable offer and cannot be withdrawn or

revised downwards after the Bid/Issue Closing Date. In case Bids are being made on behalf of the Eligible

QIB and the Application Form is unsigned, it shall be assumed that the person submitting the Application

Form and providing necessary instructions for transfer of the Bid Amount to the Escrow Account, on behalf

of the Eligible QIB is authorised to do so.

4. Eligible QIBs may submit an Application Form, including any revisions thereof, along with the Bid

Amount transferred to the escrow account specified in the application form and a copy of the PAN card or

PAN allotment letter and/or any other documents mentioned in the Application Form, during the Bid/ Issue

Period to the BRLMs.

134

5. Bidders will be required to indicate the following in the Application Form:

• full official name of the Bidder to whom Equity Shares are to be Allotted, complete address, e-mail

id, PAN details, phone number and bank account details;

• number of Equity Shares Bid for;

• price at which they are agreeable to subscribe for the Equity Shares and the aggregate Bid Amount

for the number of Equity Shares Bid for;

• details of the depository account to which the Equity Shares should be credited;

• equity shares held by the Bidder in our Company prior to the Issue; and

• it has agreed to certain other representations set forth in the Application Form.

NOTE: Eligible FPIs are required to indicate the SEBI FPI registration number in the Application Form.

The Bids made by the asset management companies or custodian of Mutual Funds shall specifically state

the names of the concerned schemes for which the Bids are made. In case of a Mutual Fund, a separate

Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in

respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the

Bids clearly indicate the scheme for which the Bid has been made. Application by various schemes or funds

of a Mutual Fund will be treated as one application from the Mutual Fund. Bidders are advised to ensure

that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares

that can be held by them under applicable laws.

6. Eligible QIBs shall be required to make the entire payment of the Bid Amount for the Equity Shares Bid

for, along with the Application Form, only through electronic transfer to the Escrow Account opened in the

name of “Alembic Pharmaceuticals Ltd-QIP Escrow” with the Escrow Bank, within the Bid/Issue Period

as specified in the Application Form sent to the respective Bidders. Please note that any payment of Bid

Amount for the Equity Shares shall be made from the bank accounts of the relevant Bidders and our

Company shall keep a record of the bank account from where such payment has been received. Bid Amount

payable on Equity Shares to be held by joint holders shall be paid from the bank account of the person

whose name appears first in the Application Form. Until Allotment, and the filing of return of Allotment

by our Company with the RoC, or receipt of final listing and trading approvals from the Stock Exchanges,

whichever is later, Bid Amount received for subscription of the Equity Shares shall be kept by our Company

in the Escrow Account and shall be utilised only for the purposes permitted under the Companies Act.

7. Once a duly completed Application Form is submitted by a Bidder and the Bid Amount is transferred to

the Escrow Account, such application constitutes an irrevocable offer and the Bid cannot be withdrawn or

revised downwards after the Bid/ Issue Closing Date. In case of an upward revision before the Bid/ Issue

Closing Date, an additional amount shall be required to be deposited towards the Bid Amount in the Escrow

Account along with the submission of such revised Bid. The Bid/ Issue Closing Date shall be notified to

the Stock Exchanges and the Eligible QIBs shall be deemed to have been given notice of such date after

receipt of the Application Form.

8. Upon receipt of the duly completed Application Form and the Bid Amount in the Escrow Account, on or

after the Bid/ Issue Closing Date, our Company shall, in consultation with BRLMs determine the final

terms, including the Issue Price of the Equity Shares to be issued pursuant to the Issue, the number of

Equity Shares to be Allocated to each Successful Bidder and the Successful Bidders to whom such Equity

Shares shall be Allocated. Upon such determination, the BRLMs will send the serially numbered CAN to

the Successful Bidders. The dispatch of a CAN, and the Placement Document (when dispatched) to a

Successful Bidder shall be deemed a valid, binding and irrevocable contract for the Successful Bidders to

subscribe to the Equity Shares Allocated to such Successful Bidders at an aggregate price equivalent to the

product of the Issue Price and Equity Shares Allocated to such Successful Bidders. The CAN shall contain

details such as the number of Equity Shares Allocated to the Successful Bidders, Issue Price and the

aggregate amount received towards the Equity Shares Allocated. Please note that the Allocation will be

at the absolute discretion of our Company and shall be in consultation with the BRLMs.

135

9. Upon determination of the Issue Price and before Allotment of Equity Shares to the Successful Bidders,

the BRLMs, shall, on our behalf, send a serially numbered Placement Document either in electronic form

or through physical delivery to each of the Successful Bidders who have been Allocated Equity Shares

pursuant to dispatch of a serially numbered CAN.

10. Upon dispatch of the serially numbered Placement Document, our Company shall Allot Equity Shares as

per the details in the CANs sent to the Successful Bidders. Our Company will inform the Stock Exchanges

of the details of the Allotment.

11. After passing the resolution for Allotment and prior to crediting the Equity Shares into the beneficiary

account of the Successful Bidders maintained by the Depository Participant, as specified in the records of

the depositories or as indicated in their respective Application Form, our Company shall apply to the Stock

Exchanges for listing approvals in respect of the Equity Shares Allotted pursuant to the Issue.

12. After receipt of the listing approvals of the Stock Exchanges, our Company shall credit the Equity Shares

Allotted pursuant to this Issue into the beneficiary accounts of the respective Allottees.

13. Our Company will then apply for the final trading approvals from the Stock Exchanges.

14. The Equity Shares that would have been credited to the beneficiary account with the Depository Participant

of the Successful Bidders shall be eligible for trading on the Stock Exchanges only upon the receipt of final

trading and listing approvals from the Stock Exchanges.

15. As per applicable law, the Stock Exchanges will notify the final listing and trading approvals, which are

ordinarily available on their websites, and our Company may communicate the receipt of the listing and

trading approvals to those Eligible QIBs to whom the Equity Shares have been Allotted. Our Company and

the BRLMs shall not be responsible for any delay or non-receipt of the communication of the final trading

and listing permissions from the Stock Exchanges or any loss arising from such delay or non-receipt.

Investors are advised to apprise themselves of the status of the receipt of the permissions from the Stock

Exchanges or our Company.

Eligible QIBs

Only Eligible QIBs are eligible to invest in the Equity Shares pursuant to the Issue, provided that with respect to

foreign portfolio investors, only Eligible FPIs applying under Schedule II of the FEMA Rules will be considered

as Eligible QIBs. FVCIs are not permitted to participate in the Issue. Currently, QIBs, who are eligible to

participate in the Issue and also as defined under Regulation 2(1)(ss) of the SEBI Regulations, are set forth

below:

• Eligible FPIs other than Category II FPI, registered with SEBI;

• insurance companies registered with the Insurance Regulatory and Development Authority of India;

• insurance funds set up and managed by army, navy or air force of the Union of India;

• insurance funds set up and managed by the Department of Posts, India.

• multilateral and bilateral development financial institutions;

• Mutual Funds, VCFs, AIFs, registered with the SEBI;

• pension funds with minimum corpus of ₹25 crore;

• provident funds with minimum corpus of ₹25 crore;

• public financial institutions;

• scheduled commercial banks;

• state industrial development corporations;

• systemically important non-banking financial companies; and

136

• the National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated November 23, 2005 of

the Government published in the Gazette of India.

ELIGIBLE FPIS ARE PERMITTED TO PARTICIPATE UNDER SCHEDULE II OF FEMA RULES IN

THIS ISSUE. ELIGIBLE FPIS ARE PERMITTED TO PARTICIPATE IN THE ISSUE SUBJECT TO

COMPLIANCE WITH ALL APPLICABLE LAWS AND SUCH THAT THE SHAREHOLDING OF THE

FPIS DO NOT EXCEED SPECIFIED LIMITS AS PRESCRIBED UNDER APPLICABLE LAWS IN

THIS REGARD. FVCIS ARE NOT PERMITTED TO PARTICIPATE IN THIS ISSUE.

In terms of the SEBI FPI Regulations, the Equity Shares issued to a single Eligible FPI or an investor group

(multiple entities registered as FPIs and directly or indirectly, having common ownership of more than fifty per

cent or common control) should not exceed 10% of post-Issue Equity Share capital of our Company. Further, in

terms of the FEMA Rules, the total holding of each FPI shall be below 10% of the total paid-up Equity Share

capital of our Company on a fully diluted basis.

In case the holding of an FPI including its investor group increases to 10% or more of the total paid-up equity

capital, on a fully diluted basis, the FPI including its investor group is required to divest the excess holding within

five trading days from the date of settlement of the trades resulting in the breach. In the event that such divestment

of excess holding is not done, the total investment made by such FPI together with its investor group will be re-

classified as FDI as per procedure specified by SEBI and the FPI and its investor group will be prohibited from

making any further portfolio investment in our Company under the SEBI FPI Regulations. However, in

accordance with Regulation 22(4) of the SEBI FPI Regulations, the FPIs who are: (i) appropriately regulated

public retail funds; (b) public retail funds where the majority is owned by appropriately regulated public retail

fund on look through basis; or (c) public retail funds and investment managers of such foreign portfolio investors

are appropriately regulated, the aggregation of the investment limits of such FPIs having common control, shall

not be applicable.

Pursuant to the SEBI Circular dated April 5, 2018 (Circular No: IMD/FPIC/CIR/P/2018/61), our Company has

appointed CDSL as the designated depository to monitor the level of FPI/NRI shareholding in our Company on a

daily basis and once the aggregate foreign investment of a company reaches a cut-off point, which is 3% below

the overall limit a red flag shall be activated. The depository is then required to inform the Stock Exchanges about

the activation of the red flag. The Stock Exchanges are then required to issue the necessary circulars/ public

notifications on their respective websites. Once a red flag is activated, the FPIs must trade cautiously, because in

the event that there is a breach of the sectoral cap, the FPIs will be under an obligation to disinvest the excess

holding within five trading days from the date of settlement of the trades.

In terms of the FEMA Rules, for calculating the aggregate holding of FPIs in a company, holding of all registered

FPIs shall be included. For a description of the restrictions applicable to the offer and sale of the Equity Shares in

the Issue in certain jurisdictions, see “Selling Restrictions” and “Purchaser Representations and Transfer

Restrictions” beginning on pages 145 and 152, respectively.

Restriction on Allotment

Pursuant to Regulation 179(2)(b) of the SEBI Regulations, no Allotment shall be made pursuant to the Issue,

either directly or indirectly, to any Eligible QIB being a Promoter, or any person related to the Promoters. QIBs,

which have all or any of the following rights, shall be deemed to be persons related to the Promoters:

• rights under a shareholders’ agreement or voting agreement entered into with the Promoters or members of

the Promoter Group;

• veto rights; or

• a right to appoint any nominee director on the Board,

Provided, however, that an Eligible QIB which does not hold any Equity Shares in our Company and which has

acquired the aforesaid rights in the capacity of a lender shall not be deemed to be related to the Promoters.

Our Company, the BRLMs and any of their respective shareholders, employees, counsel, officers, directors,

representatives, agents, advisors or affiliates shall not be liable for any amendment or modification or

change to applicable laws or regulations, which may occur after the date of this Placement Document.

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Eligible QIBs are advised to make their independent investigations and satisfy themselves that they are

eligible to apply. Eligible QIBs are advised to ensure that any single application from them does not exceed

the investment limits or maximum number of Equity Shares that can be held by them under applicable law

or regulation or as specified in the Preliminary Placement Document or this Placement Document. Further,

Eligible QIBs are required to satisfy themselves that their Bids would not eventually result in triggering a

tender offer under the SEBI Takeover Regulations, and ensure compliance with applicable laws.

A minimum of 10% of the Equity Shares offered in the Issue shall be Allotted to Mutual Funds. In case of

undersubscription in such portion, such portion or part thereof may be Allotted to other Eligible QIBs.

Note: Affiliates or associates of the BRLMs who are Eligible QIBs may participate in the Issue in compliance

with applicable laws.

Bid Process

Application Form

Eligible QIBs shall only use the serially numbered Application Forms (which are addressed to them) circulated

by our Company and/or the BRLMs in either electronic form or by physical delivery for the purpose of making a

Bid (including revision of a Bid) in terms of the Preliminary Placement Document.

By making a Bid (including the revision thereof) for Equity Shares through Application Forms and pursuant to

the terms of the Preliminary Placement Document, the Eligible QIB will be deemed to have made all the following

representations and warranties and the representations, warranties and agreements made under “Notice to

Investors”, “Representations by Investors”, “Selling Restrictions” and “Purchaser Representations and Transfer

Restrictions” on pages 1, 3, 145 and 152, respectively:

1. Each Eligible QIB confirms that it is a QIB in terms of Regulation 2(1)(ss) of the SEBI Regulations and is

not excluded under Regulation 179(2)(b) of the SEBI Regulations, has a valid and existing registration

under the applicable laws in India (as applicable) and is eligible to participate in this Issue;

2. Each Eligible QIB confirms that it is not a Promoter and is not a person related to the Promoters, either

directly or indirectly and its Application Form does not directly or indirectly represent the Promoters or

Promoter Group or persons related to the Promoters;

3. Each Eligible QIB confirms that it has no rights under a shareholders’ agreement or voting agreement with

the Promoters or members of the Promoter Group, no veto rights or right to appoint any nominee director

on the Board other than those acquired in the capacity of a lender not holding any Equity Shares which

shall not be deemed to be a person related to the Promoters;

4. Each Bidder confirms that in the event it is resident outside India, it is an Eligible FPI, having a valid and

existing registration with SEBI under the applicable laws in India or a multilateral or bilateral development

financial institution, and is eligible to invest in India under applicable law, including the FEMA Rules, as

amended, and any notifications, circulars or clarifications issued thereunder, and has not been prohibited

by SEBI or any other regulatory authority, from buying, selling, dealing in securities or otherwise accessing

the capital markets and is not an FVCI;

5. Each Eligible QIB acknowledges that it has no right to withdraw or revise its Bid downwards after the Bid

/ Issue Closing Date;

6. Each Eligible QIB confirms that if Equity Shares are Allotted through this Issue, it shall not, for a period

of one year from Allotment, sell such Equity Shares otherwise than on the Stock Exchanges;

7. The Bidder confirms that in the event it is resident outside India, it is an Eligible FPI, and not an FVCI;

8. Each Eligible QIB confirms that the Eligible QIB is eligible to Bid and hold Equity Shares so Allotted

together with any Equity Shares held by it prior to the Issue, if any. Each Eligible QIB further confirms

that the holding of the Eligible QIB, does not and shall not, exceed the level permissible as per any

applicable regulations applicable to the Eligible QIB;

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9. Each Eligible QIB confirms that its Bids would not eventually result in triggering a tender offer under the

SEBI Takeover Regulations;

10. The Eligible QIB agrees that it will make payment of its Bid Amount along with submission of the

Application Form within the Bid/Issue Period. Each Eligible QIB agrees that once a duly filled Application

Form is submitted by an Eligible QIB, whether signed or not, and the Bid Amount has been transferred to

the Escrow Account, such Application Form constitutes an irrevocable offer and cannot be withdrawn or

revised downwards after the Bid/Issue Closing Date;

11. The Eligible QIB agrees that although the Bid Amount is required to be paid by it along with the

Application Form within the Issue Period in terms of provisions of the Companies Act, our Company

reserves the right to Allocate and Allot Equity Shares pursuant to this Issue on a discretionary basis in

consultation with the BRLMs. The Eligible QIB further acknowledges and agrees that the payment of Bid

Amount does not guarantee Allocation and/or Allotment of Equity Shares Bid for in full or in part;

12. The Eligible QIB acknowledges that in terms of the requirements of the Companies Act, upon Allocation,

our Company has disclosed names as “proposed Allottees” and percentage of post-Issue shareholding of

the proposed Allottees in this Placement Document and such QIB consents of such disclosure, if any Equity

Shares are Allocated to it. However, the Eligible QIB further acknowledges and agrees that, disclosure of

such details as “proposed Allottees” in this Placement Document does not guarantee Allotment to them, as

Allotment in the Issue shall continue to be at the sole discretion of our Company, in consultation with the

BRLMs.

13. The Eligible QIB confirms that the number of Equity Shares Allotted to it pursuant to the Issue, together

with other Allottees that belong to the same group or are under common control, shall not exceed 50% of

the Issue. For the purposes of this representation:

(a) QIBs “belonging to the same group” shall mean entities where (a) any of them controls, directly or

indirectly, through its subsidiary or holding company, not less than 15% of the voting rights in the

other; (b) any of them, directly or indirectly, by itself, or in combination with other persons, exercise

control over the others; or (c) there is a common director, excluding nominee and Independent

Directors, amongst an Eligible QIB, its subsidiary(ies) or holding company and any other QIB; and

(b) ‘Control’ shall have the same meaning as is assigned to it by Regulation 2(1)(e) of the SEBI

Takeover Regulations;

14. The Eligible QIBs acknowledge that no Allocation shall be made to them if the price at which they have

Bid for in the Issue is lower than the Issue Price.

15. Each Eligible QIB confirms that it shall not undertake any trade in the Equity Shares credited to its

beneficiary account maintained with the Depository Participant until such time that the final listing and

trading approvals for the Equity Shares issued pursuant to this Issue, are issued by the Stock Exchanges.

16. Each Eligible QIB acknowledges, represents and agrees that its total voting rights in our Company does

not exceed 10% of the total issued share capital of our Company.

ELIGIBLE QIBs MUST PROVIDE THEIR NAME, COMPLETE ADDRESS, PHONE NUMBER,

EMAIL ID, BANK ACCOUNT DETAILS, BENEFICIARY ACCOUNT DETAILS, PAN, DEPOSITORY

PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND

BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. ELIGIBLE QIBs MUST

ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS

THE NAME IN WHICH THEIR BENEFICIARY ACCOUNT IS HELD.

IF SO REQUIRED BY THE BRLMs, THE ELIGIBLE QIBs SUBMITTING A BID, ALONG WITH THE

APPLICATION FORM, WILL ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO THE

BRLMs TO EVIDENCE THEIR STATUS AS A "QIB" AS DEFINED HEREINABOVE.

IF SO REQUIRED BY THE BRLMs, ESCROW BANK OR ANY STATUTORY OR REGULATORY

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AUTHORITY IN THIS REGARD, INCLUDING AFTER BID/ISSUE CLOSING DATE, THE ELIGIBLE

QIBs SUBMITTING A BID AND/OR BEING ALLOTTED EQUITY SHARES IN THE ISSUE, WILL

ALSO HAVE TO SUBMIT REQUISITE DOCUMENT(S) TO FULFILL THE APPLICABLE KNOW

YOUR CUSTOMER (KYC) NORMS.

Demographic details such as address and bank account will be obtained from the Depositories as per the

Depository Participant account details provided in the Application Form. However, for the purposes of refund of

all or part of the Bid Amount submitted by the Bidder, the bank details as mentioned in the Application Form

from which the Bid Amount shall be remitted for the Equity Shares applied for in the Issue, will be considered.

The submission of an Application Form and payment of the Bid Amount pursuant to the Application Form by a

Bidder shall be deemed a valid, binding and irrevocable offer for such Bidder and becomes a binding contract on

a Successful Bidder upon issuance of the CAN and the Placement Document (when dispatched) by our Company

(by itself or through the BRLMs) in favour of the Successful Bidder.

Submission of Application Form

All Application Forms must be duly completed with information including the number of Equity Shares applied

for along with proof of payment and a copy of the PAN card or PAN allotment letter. The Bid Amount shall be

deposited in the Escrow Account as is specified in the Application Form and the Application Form shall be

submitted to the BRLMs either through electronic form or through physical delivery at either of the following

addresses:

Name Address Contact Person Email

Phone (Telephone)

Monarch

Networth

Capital

Limited

Monarch House, Opp.

Prahaladbhai Patel

Garden, Nr. Ishwar

Bhuwan, Commerce Six

Roads, Navarangpura,

Ahmedabad- 380 009,

Gujarat

Jenny Bagrecha /

Anshit Acharya [email protected]

+91 96389 71425/

+91 99989 44599

HDFC Bank

Limited

Investment Banking

Group,

Unit No 401 & 402, 4th

Floor, Tower B,

Peninsula Business Park,

Lower Parel, Mumbai ‐

400 013

Ravi Sharma /

Harsh Thakkar [email protected]

+91 75063 77488/ +91

99203 27474

The BRLMs shall not be required to provide any written acknowledgement of the receipt of the Application Form

and the Bid Amount.

Bidders shall pay the entire Bid Amount along with the submission of the Application Form, within the Bid/Issue

Period.

Payment of Bid Amount

Our Company has opened the Escrow Account in the name of “Alembic Pharmaceuticals Ltd-QIP Escrow” with

the Escrow Bank, in terms of the Escrow Agreement. Each Bidder will be required to deposit the Bid Amount

payable for the Equity Shares Bid by it along with the submission of the Application Form and during the Bid/Issue

Period. Bidders can make payment of the Bid Amount only through electronic transfer of funds from their own

bank account.

Note: Payments are to be made only through electronic fund transfer. Payments made through cash or

cheques are liable to be rejected. Further, if the payment is not made favoring the Escrow Account, the

Application Form is liable to be rejected.

Pending Allotment, our Company undertakes to utilise the amount deposited in the Escrow Account only for the

purposes of (i) adjustment against Allotment of Equity Shares in the Issue; or (ii) repayment of Bid Amount if our

Company is not able to Allot Equity Shares in the Issue.

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Pricing and Allocation

There is a minimum pricing requirement under the SEBI Regulations. The Floor Price shall not be less than the

average of the weekly high and low of the closing prices of the Equity Shares quoted on the stock exchange during

the two weeks preceding the Relevant Date. Our Company has also offered a discount of ₹ 48.75 per Equity Share, in

accordance with and in terms of Regulation 176 of the SEBI Regulations.

The “Relevant Date” referred to above will be the date of the meeting in which the Board or a duly constituted

committee of the Board, decides to open the Issue and “stock exchange” means any of the recognized stock

exchanges in India on which the Equity Shares of the Company of the same class are listed and on which the

highest trading volume in such Equity Shares has been recorded during the two weeks immediately preceding the

Relevant Date.

Build up of the Book

The Eligible QIBs shall submit their Bids (including any revision thereof) through the Application Forms within

the Bid/Issue Period to the BRLMs. Such Bids cannot be withdrawn or revised downwards after the Bid/ Issue

Closing Date. The book shall be maintained by the BRLMs.

Method of Allocation

Our Company shall determine the Allocation in consultation with the BRLMs on a discretionary basis and in

compliance with Chapter VI of the SEBI Regulations.

Application Forms received from the Eligible QIBs at or above the Issue Price shall be grouped together to

determine the total demand. The Allocation to all such Eligible QIBs will be made at the Issue Price. Allocation

to Mutual Funds for up to a minimum of 10% of the Issue Size shall be undertaken subject to valid Bids being

received at or above the Issue Price.

In case of cancellations or default by the Bidders, Company in consultation with BRLMs have the right to

reallocate the Equity Shares at the Issue Price among existing or new Bidders at their sole and absolute discretion

subject to the applicable laws.

THE DECISION OF OUR COMPANY IN CONSULTATION WITH THE BRLMs IN RESPECT OF

ALLOCATION SHALL BE FINAL AND BINDING ON ALL ELIGIBLE QIBs. ELIGIBLE QIBs MAY

NOTE THAT ALLOCATION OF EQUITY SHARES IS AT THE SOLE AND ABSOLUTE

DISCRETION OF OUR COMPANY AND ELIGIBLE QIBs MAY NOT RECEIVE ANY ALLOCATION

EVEN IF THEY HAVE SUBMITTED VALID APPLICATION FORMS AND PAID THE ENTIRE BID

AMOUNT AT OR ABOVE THE ISSUE PRICE WITHIN THE ISSUE PERIOD. NEITHER OUR

COMPANY NOR THE BRLMs ARE OBLIGED TO ASSIGN ANY REASON FOR ANY NON-

ALLOCATION.

CAN

Based on receipt of the serially numbered Application Forms and Bid Amount, our Company, in consultation with