According to a BSE filing, the pharmaceuticals firm will transfer the medical equipment business to a wholly-owned subsidiary by allotment of equity shares of Rs 10 each.
The revenues and profits derived from the new subsidiary will be consolidated in the parent company, Morepen Laboratories Limited, the filing added. However, the company will seek regulatory approval for the same.
Following the update, shares of Morepen Laboratories rallied 11 per cent to Rs 56.95 on Thursday before trading at Rs 54.90 at 10.50 am. BSE Sensex was trading 166.9 points, or 0.3 per cent, higher at 57,505.11 at the same time.
The pharmaceutical business of the company contributes Rs 834.91 crore or 74.27 per cent of revenue, whereas the company derives 289.29 crore or 25.73 per cent revenue from the medical device segment.
The net worth of the pharmaceutical segment is Rs 391.88 crore, which is a little more than 88 per cent of the total net worth of the company. Medical device segment contributes the remaining 12 per cent, which is worth 53.09 crore.
The company intends to complete the transfer of medical device business, valued at Rs 55 crore, in the financial year 2021-22.