Warner-Lambert To Raise Equity In Indian Subsidiary

Warner-Lambert of the USA has applied to the Indian Foreign InvestmentPromotion Board to increase its stake in one of its Indian subsidiaries, Parke-Davis (India) Ltd, to 75% from the current level of 40%.

The company has listed a series of new molecules that it will bring in through Parke-Davis in a move to persuade the Indian government to grant permission. If the proposal goes through, Parke-Davis will have the highest foreign holding of any publicly-listed Indian pharmaceutical company, according to the Indian Economic Times.

While increasing a stake to 51% by preferential allotment in the pharmaceutical industry is automatically permitted, going to 51% by buying shares from the existing shareholders requires FIPB clearance. Furthermore, going above 51% needs FIPB clearance. It is noted that over the years, Johnson & Johnson has been able to develop a holding of 75% by virtue of it being categorized as a consumer products company.