CHENNAI | TUESDAY, 19 MAY 2020 COMPANIES 3. <

AMRITHA PILLAYMumbai,18May

R eliance Industries (RIL)said onMonday that itscore business was hit

significantlybydemand-relatedchallenges, both in India andoverseas. The company listedCovid-19 as an ‘internal risk’ initsletterofofferfortheproposedrights issue.

“The impact of Covid-19 onour business and operations isuncertain,” the firm said. “Ourrefining,petrochemical,aswellas oil and gas busi-nesseshavereceivedademand-sideshock— not just in Indiabutacrosstheworld,”the letter stated.

It added: “Thelockdown is expect-edtohaveanadverseeffect in the short-to-mediumterm on several businessesincludingrefining,petrochem-ical, and oil and gas, as well asretail (non-grocery).”

Referring to the pandemicand its impact on proposedstrategictransactions,thecom-pany,initsofferletter,said:“TheimpactofCovid-19onourbusi-

ness will depend on a range offactors,whichwearenotabletoaccurately predict…These fac-tors include… an adverse

impactonourabilityto engage in new, orconsummate pend-ing, strategic trans-actionson—agreedtermsandtimetableorat all.”

Over the pastmonth, RIL has

announcedthreedifferentdealsfor Jio Platforms — Facebookagreed to invest ~43,574 crorefor a 9.99 per cent stake, VistaEquity Partners will infuse~11,367 crore for a 2.32 per centequitystake,andprivateequityfirmSilverLakewillpickup1.15per cent stake for ~5,656 crore.Further, RIL said on Sunday

thatGeneralAtlanticwouldalsoinvest close to ~6,598 crore inthedigital business.

Onitsproposedstakesaleinits oil-to-chemicals (O2C) divi-sion, it stated that the firmwasexploringvariousopportunitiesto bring in strategic or otherinvestors, saying that “to facili-

tate such investments, it ispro-posed to transfer theO2Cbusi-ness into a separate wholly-owned subsidiary of our firm.”

According to RIL, imple-mentation of this scheme isdelayed; it could potentiallyaffectmonetisationplans.Asofend-March, RIL’s total borrow-ings amounted to ~3.36 trilliononaconsolidatedbasis.

In August, RIL announcedthat it sought tosell 20percentstakeinitsO2CdivisiontoSaudiAramco—adeal peggedat $15billion.Theletterdoesnotmen-tion the proposed deal withAramco. So far, RIL has deter-mined the impact of Covid-19in its financial statements, inwhich it has disclosed it as an‘exceptional item’ of ~4,245crore, and at ~899 crore net oftaxes — in the profit and lossstatement for FY20. The com-pany added there has been asubstantial drop in oil prices,accompaniedwithanunprece-denteddemanddestruction.

Commenting onRIL’s retailbusiness, the letter stated thatthe outbreak had dentedRelianceRetail’sbusinessheav-ily, given the restriction onmovement.

Our core business hit bydemand-side shock: RIL

SOHINI DASMumbai,18May

Most Indian pharma plantsthatwere inspected by theUSdrug regulator in the last fewmonths or so have receivedpositive outcomes.

As drug majors in thecountry have graduallyimproved compliance,against the backdrop of highshortages in the US, analystssee this as a positive sign forpharma exports.

Drug shortages haveremained high this year inthe US and the CLSA notedthat the issue seems to beexacerbatedwhen it comes toinjectable products, whichaccount for over 60 per centof the current drug shortages.India accounts for roughly 30per cent of the generic drugsupply to the US and it is agreat opportunity for theplayers here.

If one looks at the inspec-tion outcomes for plantsbetween March and May,most have receivedEstablishment InspectionReports (EIRs) from the USFood and DrugAdministration (USFDA). Forexample, Lupin’s active phar-maceutical ingredient (API)unit in Vizag got an EIR inmid-May.

The facilitywas inspectedby theUSFDA in January thisyear. Earlier, Lupin’sPithampur plant -I andNagpur plants (both formu-lation making units) hadreceived EIRs in April.

Following these, somebrokerages upgraded theLupin stock to ‘buy’ from‘reduce’. Analysts see thecombination of Indian plantsclearingUSFDA scrutiny andthe growing drug shortagesin theUS as positive signs forexporters here.

CLSA analyst Arun Dalalnoted that fewerwarning let-

ters, partly aided by fewerinspections, are nonethelesspositive.

Kedar Upadhye, globalchief financial officer(CFO) at Cipla, saidwhereverit sees any demand uptick,the company will attemptto supply. Industry insiderssaid the current drug short-ages could be only a short tomedium termopportunity assuch, but the EIRs will go along way to boost overallexports.

Sudarshan Jain, secretarygeneral of the IndianPharmaceutical Alliance(IPA), felt that the pharmasector hasworked on improv-ing compliance and the stringof EIRs is a testimony to that.

Meanwhile, given thetransportation and logisticalissues during the pandemic,the USFDA, too, is looking atalternative inspection toolsand approaches. In a recentstatement, it noted, “DuringCovid-19, the US Food andDrug Administration willcontinue to utilise and imple-

ment additional alternativeinspection tools andapproacheswhile postponingdomestic and foreign routinesurveillance inspections.” Itsaid while the pandemic hasaddednewcomplexities to itsnormal operations, it imple-mented alternativeapproaches with onsite sur-veillance inspections.

Jain, however, does notsee any slack in scrutiny bythe agency. He said the USregulatory authority hasenough checks and balancesin place to ensure that quali-ty paramaters aremaintainedacross the globe.

The FDAnoted, “Based ondecades of experience withour diverse regulated indus-tries, we believe most FDA-regulated firms understandand appreciate their respon-sibility to ensure the safety ofthe products they manufac-ture or produce....Most firmsstrive to reliably providequality products and main-tain the integrity of the sup-ply chain.”

DrugshortageinUSashotinarmforIndianpharmafirms

Liststhepandemic asinternalriskinitsletterofofferforupcomingrightsissue

Marutidelivers5,000carsinlastfewdays; 1,350showroomsoperationalMaruti Suzuki India onMonday said it had deliveredover 5,000cars in thepast fewdays with over 1,350 show-rooms operational across thecountry at present.

The company has put inplacecomprehensivestandardoperating procedures (SoPs)for all its dealerships, the car-maker said in a statement.

With theSoPs inplace,over1,350 Maruti Suzuki show-rooms and over 300 TrueValue outlets are operationalnow, it added.

“The company has put inplacecomprehensivenormstoensure that their car buyingexperience is completely safe.These norms are based onguidelines from the centraland state governments,” said

Kenichi Ayukawa, managingdirector and chief executiveofficer,Maruti Suzuki India.

He further said: “Wewould like to encourage ourcustomers to digitally chooseand book their car and takeadvantage of the convenienceof homedelivery of their newvehicles.” The automaker hasa network of 3,086showrooms across 1,964towns and cities.

“All of them will abide bythe new safety protocols. Theremaining showrooms would

open in due course if they arenot incontainment zonesor ifnot specifically restricted byany localguidelines,” thecom-pany said.

On Sunday, the companysaid itsGurugramplantwouldresume production fromMonday, after 57 days of clo-sure due to the coronavirus-induced lockdown.

The auto major hasresumed operations at itsManesar-based plant earlierthis month after around 50days of closure. PTI

RIL EBITDA MIXConsolidatedEbitda:Q4FY20

(~crore)

Source: Company presentation

Refining&marketing 6,614Petchem 5,938Oil&gas --4466Retail 22,,555566Digital services 66,,445522Total 25,866

Source: USFDA, CLSA

Date Company Plant Status Last inspectionMay 4,’20 Alembic Panelav EIR Mar 2020Apr 30,’20 Lupin Pithampur Unit-1 EIR Feb 2020Apr 21,’20 Aurobindo Unit IV VAI Nov 2019Apr 15,’20 Lupin Mandideep Unit II EIR Dec 2018Apr 9,’20 Dr Reddy Miryalguda EIR Mar 2020Apr 3,’20 Lupin Aurangabad EIR Feb 2020Mar 17,’20 Alembic Kharkadi EIR Jan 2020

Year No. of drugs inshortage list

2015 262016 232017 352018 50Jan 2020 109Apr 2020 110

US DRUGCRUNCHSummaryofoutcomesofrecentinspectionsofsomeIndianpharmafirms

SOHINI DASMumbai,18May

Pune-based pharmaceuti-cal marketing companyBrinton Pharmaceuticals isgearing up to export anti-viral drug Favipiravir to 18countries, and awaitingapproval from the Indiandrug controller to launchthe drug in India.

Favipiravir is under clin-ical trial in many countriesas a potential treatment forCovid-19. In IndiaGlenmark Pharmaceuticalsis conducting the trials thathave entered phase 3.

After the trials are overin India, the DrugController General of India(DCGI) is likely to give thenod to market the drug,whichwas originally devel-oped by Japan’s FujifilmToyama Chemical, a sub-sidiary of Fujifilm Corp.The drug is not yet part ofthe treatment protocol forCovid-19 here, but sourcesclaim that it is on the taskforce’s list of the mostpromising drugs for treat-ing the coronavirus disease.

Speaking to BusinessStandard, Rahul KumarDarda, chairman and man-aging director of BrintonPharma said Hyderabad-based Optimus Pharma ismaking the drug for them.“Fujifilm is supplying theintermediate of the drug toOptimus, which is makingthe active pharmaceuticalingredient (API) for thedrug. They will also supplythe formulation tous,whichwe will export to countrieslike Nepal, Cambodia,Vietnam, Canada,Caribbean etc,” Darda said.

Brinton has a stock ofabout 100,000 tablets readyfor export.

Pune firmto exportFavipiravir to18 countries

DrugfirmGlaxoSmithKlinePharmaceuticalsonMondayreporteda5.95percentdeclineinitsconsolidatednetprofitto~138.07croreforthefourthquarterendedMarch31,2020.

Thecompanyhadpostedanetprofitof~146.81croreforthesameperiodpreviousfiscal,GlaxoSmithKlinePharmaceuticalssaidinaBSEfiling.

Consolidatedrevenuefromoperationsstoodat~775.80croreforthequarterunderconsideration.Itwas~750.81croreinthesameperiodayearago. PTI

GSK Q4 profit declines 6% to ~138 cr

REUTERSBengaluru,18May

Early data from Moderna’sCovid-19 vaccine, the first tobe tested in the US, showedthat it produced protectiveanti-bodies inasmall groupofhealthy volunteers, the com-pany said onMonday.

The data are from eightpeoplewhotookpart inasafe-ty trial thatkickedoff inMarchas theglobalpandemiccausedby the novel coronavirus wasspreading.

In the trial of 45 volun-teers, conducted by theNational Institute of Allergyand InfectiousDiseases, eightvolunteerswhogot twodosesof the vaccine produced pro-tective antibodies roughly onpar with people who recov-ered from a natural infectionof the virus that causes theCovid-19 illness, the USbiotechnology company saidin a news release.

The study, which was notdesigned to prove the vaccineworks, offered an earlyglimmer of hope that it couldprovide protection againstthe virus.

The news lifted shares ofModerna about 20 per cent to$79.39 in mid-morning trad-ing and drove the broaderstockmarket higher.

Scientists are still trying tounderstandwhat level of anti-bodies will ultimately proveprotective against the novelcoronavirus, and how long

that protectionwill last.The vaccine appeared to

show a dose response, mean-ing that people who got high-er doses had higher levels ofantibodies.

Moderna’svaccinehasgot-ten the green light to start thesecond stage of human test-ing, and last week, US regula-tors gave the vaccine “fast-track” status to speed up theregulatory review.

“We are investing to scaleup manufacturing so we canmaximize the number of dos-eswecanproduce tohelppro-tect asmanypeople aswe canfrom SARS-CoV-2,” ModernaChief Executive OfficerStephane Bancel said.

The company’s vaccine isat the forefrontof theefforts toarrest the fast-spreadingvirus.Last week, it won theUS.

healthagency’s “fast-track”label to speedup the regulato-

ry review.Moderna expects to start a

larger late-stage trial in July.There are currently no

approved treatments or vac-cines forCovid-19, andexpertspredict a safe and effectivevaccine could take 12 to 18months to develop.

The company has signeddeals with Swiss contractdrugmaker Lonza Group AGandtheUSgovernment topro-ducemassive quantities of itsvaccine.

The vaccine, mRNA-1273,wasalso found tobegenerallysafe and well tolerated in theearly-stage study, the drugdeveloper said.

One person in the trialexperienced redness aroundthe injection site, which wascharacterized as a “grade 3”side effect. No serious sideeffectshadbeen reported, thecompany said.

Moderna’sCovidvaccineshowsearlypromise

SomemajorIndianfirmshavegotEIRsfromtheUSFDA

TataMotorsonMondayannouncedapackageofoffers forsafeandconvenientpersonalmobilitywitheasy financing, tohelpmaintainsocialdis-tancing norms amid the nationwide lockdown.

Under the package, with features such asaffordable EMIs with long-tenure loans andspecial offers for frontlinewarriors, customerscan drive home the entry-level model TiagowithcustomisedEMIplanstartingat just~5,000every month (for a loan of ~5 lakh) for six-

months. This EMI amount then graduallyincreasesoveramaximumtenureof fiveyears,the company said.

Also, on its entire range of cars and sportsutility vehicles, the company is offering 100percent on-road funding, Tata Motors said in arelease.

As an additional benefit, customers canchoose from three value-adding options whilepaying their finalEMI, thecompanysaid. PTI

TataMotors offers easy financingoption, special benefits for doctors

PAGE 9RELIANCEINDUSTRIES WILLPUT SEBI’S RIGHTSENTITLEMENTPLATFORM TO TEST

Printed and Published by S Jayaraam onbehalf of Business Standard PrivateLimited and printed at MNS PrintersPrivate ltd,76/1,Noombal Village ,

Poonamallee High Road, Velappanchavadi,Chennai-600 077 and published at

2nd Floor, Ganesha Towers,New No.104,Old No.90,Dr. Radhakrishnan Salai,

Mylapore, Chennai - 600 004

Editor : Shyamal Majumdar

RNI No:70127/1998

Readers should write to the editor atfeedback@bsmail.in

Ph:044-24322608,Fax:+91-44-24320094

For Subscription and Circulationenquiries please contact:

Ms. Mansi SinghHead-Customer Relations

Business Standard Private Limited.H/4 & I/3, Building H,Paragon Centre, Opp.

Birla Centurion, P.B.Marg, Worli,Mumbai - 400013

E-mail: subs_bs@bsmail.in“or sms, SUB BS to 57007”

DISCLAIMER News reports and featurearticles in Business Standard seek to presentan unbiased picture of developments in themarkets, the corporate world and thegovernment. Actual developments can turnout to be different owing to circumstancesbeyond Business Standard’s control andknowledge. Business Standard does not takeany responsibility for investment or businessdecisions taken by readers on the basis ofreports and articles published in thenewspaper. Readers are expected to form theirown judgement.Business Standard does not associate itselfwith or stand by the contents of any of theadvertisements accepted in good faith andpublished by it. Any claim related to theadvertisements should be directed to theadvertisers concerned.Unless explicitly stated otherwise, all rightsreserved by M/s Business Standard Pvt. Ltd.Any printing, publication, reproduction,transmission or redissemination of thecontents, in any form or by any means, isprohibited without the prior written consent ofM/s Business Standard Pvt. Ltd. Any suchprohibited and unauthorised act by anyperson/legal entity shall invite civil andcriminal liabilities.

No Air Surcharge

Business StandardCHENNAI EDITION