Shares of pharmaceutical company Bajaj Healthcare Ltd surged more than 3% to Rs 357 per share in early trade on Thursday after the company said it was entering the highly regulated opiate processing business after winning two government tenders sending its shares to a nearly three-month peak. The stock extended its gains for a sixth straight session to its highest level since April and is up about 24% over the past five sessions.

When it won the tender in the field, the company said the government had eased the processing of opiates to private companies for the first time in the country’s history.

Bajaj Healthcare said in an exchange filing that the orders provided the government with opium-derived alkaloids and active pharmaceutical ingredients (APIs), giving private companies the first access to the state-controlled opium market.

“Bajaj Healthcare Limited (BHL), a leading manufacturer of APIs, Intermediates and Formulations, has been awarded two tenders from the Government of India for the production of Concentrated Poppy Straw (CPS) and Alkaloids/Active Pharmaceuticals – Reg and Opioid Gum, Revenue Department, Government Offices of the Chief Financial Officer. GOI Opium and Alkaloid Factory,” it said.

Anil Jain, joint MD of Bajaj Healthcare, said: “The opiate market in India has huge potential and the receipt of this order opens the door to new and more lucrative vertical markets.”

The company plans to execute orders at its API (active pharmaceutical ingredient) manufacturing unit in the western state of Gujarat. Overall, profits will increase due to higher plant capacity utilisation. Bajaj Healthcare was established in 1993 and specialised in producing intermediates, APIs and formulations. BHL has a global presence in countries such as Europe, the US, Australia, Africa, the Middle East and South America.

Shares of Bajaj Healthcare are down more than 14% in 2022 (year-to-date), while shares of benchmark Sensex are down about 9%.