Indian based pharmaceutical giant, Strides Shasun Ltd, has recently announced an organizational restructuring plan, which will see it demerge and list its active pharmaceutical ingredients (API) business, exit the probiotics sector and cap its investment in the biotech business.

The company based in Bengaluru said it will retain its consumer-facing formulations business in regulated and emerging markets and carve out its business-to-business (B2B) operations.

Strides has sought shareholder approval to de-merge the commodity API business. A related API business currently owned by SeQuent Scientific Ltd (which is owned by the promoters of Strides Shasun) will also be merged into the proposed new API company in a bid to provide critical size to this business, as suggested by the filing.

This new API company will have five manufacturing sites. This includes three facilities approved by the US Food and Drug Administration (US FDA).

Strides Shasun plans to rename itself as Strides Pharma Ltd. Post restructuring, the new Strides Pharma will comprise its retained formulations business having four US FDA-approved plants in India, Europe and Singapore, and three research and development (R&D) centres. This business will have a front-end presence in the regulated markets of Australia, US and UK and emerging markets of Africa and India.

In Africa, Strides Shasun plans to consolidate manufacturing of branded generics products at its Kenya unit and divest its remaining six generic facilities in Africa to the existing management team.

“The structuring is directed towards having a sharper focus on compliance, supply chain and front-ends to provide the necessary growth impetus for its consumer facing formulations business. This business is expected to have a superior margin profile, better asset turnover and a healthy return on capital.” Strides Shasun said.