Cadila Healthcare to demerge consumer products arm

Cadila Healthcare may demerge its consumer products division into Carnation Nutura. Shareholders will get four shares in Carnation for every 15 shares held in Cadila Healthcare. The face value of Carnation Nutura is Rs 10, while that of Cadila Healthcare is Rs 5. The promoters have created Zydus Hospital & Medical Research for the demerger scheme, which will be merged with Cadila Healthcare.

After the demerger, Cadila's holding in Carnation Nutura will increase to 71% as against the present 61%. The number of shares outstanding for Cadila Healthcare will be 13.6 crore as against 12.6 crore. On the other hand, the number of outstanding shares of Carnation Nutura is 55 lakh which will increase to 3 crore. It had an EPS of Rs 8 in FY08.

Carnation Nutura's brands include Nutralite, which has sales of Rs 56 crore; Sugar Free, and Everyouth from Cadila's portfolio. They have combined sales of Rs 100 crore. Cadila Healthcare has given a sales guidance of over USD 1 billion by 2010 and USD 3 billion by 2015.