Syngene International, a leading clinical research organisation (CRO) and a part of Biocon, will come out with an initial public offering (IPO) with a price band of Rs.240 and Rs.250.
The offer will open for subscription from July 27 to July 29, 2015, and the company aims to raise Rs.530-550 crore through this issue. The equity shares are proposed to be listed on the BSE and the NSE by August 11, 2015.
The IPO is an offer for sale by Biocon of a part of its shareholding in Syngene. Biocon, along with its subsidiary, Biocon Research holds 84.5 per cent stake in Syngene and post issue, this will come down to 74.5 per cent.
Syngene is a pure play service organisation offering integrated drug discovery and development services with capabilities in medicinal chemistry, biology, in vivo pharmacology and toxicology.
In January, Biocon had sold 10 per cent stake in Syngene for Rs.380 crore to private equity fund Silver Leaf Oak.
Addressing media, Kiran Mazumdar-Shaw, CMD, Biocon said, that owing to capital expenditure requirements, Biocon was monetising its investment in Syngene. “At Biocon, we have a large portfolio of biosimilars and need large capacity expansion and felt it justifiable to monetise the investment in Syngene. It would allow Biocon to tap into opportunities in regulated markets.”
Syngene has 221 customers including 8 of the top 10 and 14 of the top 20 biopharmaceutical enterprises.
“We are the most preferred research services company in this part of the world,” Ms. Mazumdar-Shaw said. Syngene has long term relationships with leading companies like Bristol Myers Squibb, Baxter and Abbott Nutrition and derives 95 per cent of its revenues from overseas players.
Capex of $ 200 million“We aim to evolve from a CRO to a CRAMS (contract research and manufacturing services) player with a thrust on contract and commercial manufacturing,” said Peter Bains, CEO, Syngene.
Towards this end, the company is already doing some commercial manufacturing at the Bengaluru facility and plans to invest $100 million in capability building to catalyse growth. Syngene also plans to build and deliver a commercial manufacturing facility in Mangaluru in 3-4 years at a cost of $100 million.
Ms. Mazumdar-Shaw said Biocon could consider de-merging Syngene in future. “That could happen only when Biocon moves into bigger markets. It will certainly not happen for the next 3-4 years.”
