Navana Pharmaceuticals has decided to construct a 5-storied fully GMP compliant generic production unit with an initial investment of Tk 1.45 billion.
The board of directors has also decided to revise the use of IPO proceeds partially and extend the time of full utilisation of the IPO proceeds.
The decisions were made at a meeting of the board of directors of the company held on Thursday, the drug maker disclosed in a price sensitive information.
Total footprint area of the production unit will be approximately 20,000 square foot with one production floor.
"This will enhance the existing production capacity by around 1000 million units per year," said the company.
Of the proposed investment of Tk 1.45 billion for the production unit, over Tk 1.32 billion will come from the company's own source and external sources such as bank loans and the remaining Tk 131.18 million from the IPO proceeds after revision, which was initially allocated for modernisation and expansion of SVPO facility.
In September 2022, Navana Pharma raised Tk 750 million under the book-building method to build a general manufacturing building and utility & engineering buildings and for renovation of its cephalosporin unit and partial loan repayment.
The company said that they have already spent 71.31 per cent of total IPO proceeds.
Now, the company has decided to extend the timeframe of full utilisation of IPO proceeds to accommodate the proposed changes until September 2025.
The revised IPO fund utilisation plan is subject to approval of shareholders in its upcoming extraordinary general meeting scheduled for May 2. The record date is on April 2.
In July last year, the drug maker also revised IPO fund utilization proceeds for increasing production capacity of the existing facilities, instead of constructing new manufacturing units to immediately meet the growing demand.
At that time, Company Secretary Jounul Abedin said construction of new buildings will take a long time while the opening of letters of credit (LC) for importing new machinery is challenging amid the prevailing dollar crunch.
Navana Pharma posted an impressive 56 per cent year-on-year growth in profit for July-December 2023, riding on higher sales revenue.
The drug maker reported Tk 224 million profits in the six months through December last year as against nearly Tk 144 million in the same period a year before.
The company's sales increased by 20 cent year-on-year to Tk 3.28 billion in July-December 2023.
Navana Pharma was incorporated in 1986, and got listed on October 18, 2022. It produces both human and animal drugs.
The veterinary division of the company manufactures and markets more than 123 high-quality medicines and feed supplements for different segments, including poultry, dairy, and aqua products.
The company's stock price fell 2.81 per cent to Tk 90 on Thursday, the last trading day of this week.
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