Aarti Drugs share price rose more than 7 percent intraday on March 8 after the company's subsidiary received approval under Production Linked Incentive (PLI) scheme for the pharmaceutical sector.
"Aarti Speciality Chemicals (ASCL), a wholly-owned subsidiary of Aarti Drugs, stands out to be one of the beneficiaries of the Government of India’s recently approved Production Linked Incentive (PLI) for the pharmaceutical sector," the company said in the release.
Aarti Speciality Chemicals received approval for 2-Methyl-5Nitro-Imidazole (2-MNI) with a committed production capacity of 4,000 MT per annum under target segment III (Key Chemical Synthesis Based KSMs/Drug Intermediates).
The rate incentive will be 10 percent of sales value per annum for a period of 6 years - FY23 to FY28
Government of India’s Department of Pharmaceuticals under the Ministry of Chemicals and Fertilizers recently launched a Production Linked Incentive (PLI) Scheme to promote domestic manufacturing by incentivising pharmaceutical manufacturers to set-up greenfield projects in India with a minimum domestic value addition in four different target segments (Two in Fermentation based - at least 90% and Two in the Chemical Synthesis based – at least 70%) with a total outlay of Rs. 6,940 crores.
The objective of the scheme is achieving self-reliance and reducing import dependence in these critical ‘Key Starting Materials (KSMs)/ Drug Intermediates/ Active Pharmaceutical Ingredients (APIs)’ in the country. The tenure of the scheme is from FY21 to FY30.
“We welcome the government’s approval to our application under PLI scheme to manufacture 2- Methyl-5Nitro-Imidazole (2-MNI) with a committed production capacity of 4,000 MT per annum," said Adhish Patil, Chief Financial Officer – Aarti Drugs.
"This is a very positive development for us, as it will help the company to diversify its product portfolio, increase the top-line and enhance the profitability & margin profile of the company," he added.
At 09:50 hrs Aarti Drugs was quoting at Rs 697.35, up Rs 31.60, or 4.75 percent on the BSE.
The share touched a 52-week high of Rs 1,026.95 and a 52-week low Rs 105.25 on 08 October 2020 and 23 March 2020, respectively.
Currently, it is trading 32.1 percent below its 52-week high and 562.57 percent above its 52-week low.