Navana Pharma to invest Tk 145 crore for new production unit

Navana Pharmaceuticals plans to invest Tk 145.27 crore to construct a five-storey new generic production unit.

The drug company will finance Tk 132 crore from its own funds and external sources and the rest Tk 13.12 crore will be used from the proceeds of its initial public offering (IPO).

The unit with an approximate footprint area of 20,000 square feet will fully comply with the World Health Organisation's good manufacturing practices (GMP).

The GMP ensures that medicinal products are consistently produced and controlled to the quality standards appropriate to their intended use.

The new production unit will enhance the company's existing annual production capacity by around 100 crore units, the company said in a price sensitive disclosure.

Meanwhile, the board of directors of Navana Pharmaceuticals changed its earlier plan on the use of IPO proceeds.

The company earlier planned using Tk 13.18 crore for modernisation and expansion of small volume parenteral and ophthalmic facility.

Now, the board has decided to use the fund in the construction of the new generic production unit.

To change the utilisation of IPO proceeds, it needs to take approval from its general shareholders.

So, the company will hold an extra ordinary general meeting on May 2 to get the approval.

In 2022, the company raised Tk 75 crore under the book-building method to build a general manufacturing building, utility and engineering buildings and for renovation of its cephalosporin unit and partial loan repayment.

The company said they had already spent 71.31 per cent of the total IPO proceeds.

Shares of Navana Pharmaceuticals dropped around 3 percent to Tk 90 on Thursday.

In the July-December period of 2023, its sales rose 20 percent year-on-year to Tk 328 crore.

In the same period, the company's profits rose 57 percent year-on-year to Tk 22 crore.