This marks the total exit of the Tatas from pharmaceuticals, following its earlier disinvestment of Merind India.

Over the last three years, the Tata group has implemented several initiatives to rationalise and streamline its business portfolio, through a process of planned disinvestment from non-strategic and non-core businesses.

With Tata Steel's earlier disinvestment of its cement business to Lafarge followed by the sale of the group's stake in ACC to Gujarat Ambuja and Tata Chemicals' proposed sale of its cement business, the group will also be completely exiting the cement sector.

The other major disinvestment moves include the group's withdrawal from paints (sale of Goodlass Nerolac), as well as disinvestment from the group's joint venture with Timex, Timkin, IBM and Lucent.

The acquisition will be carried out in a phased manner over the next four months. Shreya Impex has paid about Rs 10 crore for the acquisition on Monday.

Shreya Impex managing director Anmol Shah informed that part of the money would come through internal accruals, while the rest would come from financial institutions. Mr Shah said, "About 60 per cent of the acquisition would be funded through internal accruals, while the balance would be via financial institutions."

He added that the company was holding talks with three financial institutions but did not divulge the names of the institutions. He added that the company would also explore the possibility of raising the money through banks.

Mr Shah said that the acquisition would enable Shreya Impex to gain quick entry into the domestic market and the strong distribution network of Rallis will provide the necessary impetus to Shreya's business strategy in India. The acquisition will allow Shreya to capitalise on its international alliances and effectively bring newer molecules to the domestic market. Mr Shah added: "Being part of the Tata group, the brand equity of Rallis fits well with Shreya's aspirations."

He added that the acquisition would unlock significant value out of the pharmaceutical business of Rallis. He added that Shreya would be able to build a strong pharma manufacturing and marketing organisation by tapping diverse opportunities and create a powerful synergy of knowledge, skills, experience and people resources. All the 300 staff will be retained by Shreya, he assured. The pharma division of Rallis had a turnover of Rs 52 crore in the financial year 2000 with a profit of Rs 8.4 crore. Major segments include gastrointestinal, respiratory tract, pain care and nutritional products. The company has a manufacturing facility at Aurangabad, where it also produces the bulk drug Dexatran and Hynidase. The division has successfully launched Nimi Rapitab, Hynidase, Rallidex and Ralrox.