The project sponsor is Hikal Limited, a company promoted by Jai Hiremath and family.

As of March 31, 2008, 74.6 % of the company’s equity is held by promoters (Kalyani steel, various family members and associates). The balance is with financial institutions (4.84 %), Foreign Institutional investors (1.92 %), individual shareholders (8.8 %) and other corporate bodies, trusts etc.

Beginning Financial year 2007-08, the company has initiated a capital expenditure plan to expand capacities for existing products as well as set up facilities for new planned products. IFC is part funding the expansion with a combination of equity and debt.

33.73 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	15.0
Equity	18.73

* These investment figures are indicative

The expansion is being carried out in the company’s existing sites in Jigani (near Bangalore), Panoli (near Vadodara) and Taloja (near Mumbai) and the sites have existing infrastructure such as roads, power and telecommunications.

The project is expected to assist Hikal’s efforts to become more internationally competitive by enhancing capacities, improving operating efficiencies and infusing long term capital.

By supporting Hikal, a mid-tier player in the CRAMS space, IFC will assist in the evolution and development of an emerging industry with long term growth prospects and strong employment potential in India.

Hikal is one of the few companies in India in the CRAMS space with a strong commitment to IPR. Through this project, Hikal will serve as a role model for a wider acceptance of IPR within the Indian pharmaceutical industry.

Hikal gets significant benefits through technology transfer from customers. By supporting process innovation in emerging markets, this investment helps a domestic company in further transforming from competing on just cost to competing on process capabilities

The project will assist in benchmarking Hikal’s environmental performance to international standards and develop an action plan to upgrade Hikal’s facilities to meet those standards.

IFC’s investment will provide:

- A package of long term debt and equity to correct the capital structure and support the growth plans of the company
- Investment by a stable long term investor like IFC will enhance the visibility of the company and provide added comfort to Hikal’s customers most of whom are large multinational pharmaceutical and agrochemical companies.

This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Potential environmental and social issues associated with this project include: management systems for quality, environmental and social issues, occupational health and safety for the staff and workers of the company as well as those of its contractors; handling of hazardous chemicals, emissions from its operations (air, water and sold wastes), and community health, safety and security.

While all Performance Standards (PSs) are applicable to this investment, the E&S review of Company and project information indicates that the investment will have impacts that must be managed in a manner consistent with the following PSs: PS1: Social and Environmental Assessment and Management Systems, PS2: Labor and Working Conditions, PS3: Pollution Prevention and Abatement and PS4: Community Health, Safety and Security.

More details on the above can be found in the Environmental and Social Review Summary (ESRS).