Gland Pharma eyes Rs 6,500 crore from biggest drug company IPO

MUMBAI: Gland Pharma, majority owned by China’s Fosun Pharma group, is launching India’s biggest initial public offering (IPO) for the sector, to raise about Rs 6,500 crore. The existing shareholders will offload stake worth about 80% of the total offer size, while the company will mobilise Rs 1,250 crore for its own use.
The company on Wednesday said that the price band for the IPO is fixed at Rs 1,490-1,500 per share and the offer will be open between November 9 and 11.The Rs 1,741-crore IPO by Eris Lifesciences, closed in 2017, is the biggest pharma IPO till date. Gland Pharma is among the first Chinese majority owned companies operating in India that is eyeing a listing on the country’s bourses. The company plans to use the IPO’s proceeds for funding its incremental working capital, capex requirements and general corporate purposes.
In October 2017, Fosun Pharma wanted to acquire a little over 86% in the Hyderabad-based company for around $1.1 billion, which at that time would have become the single-largest Chinese investment in India. However, after the government flagged concerns over the proprietary technology developed by the Indian company falling into Chinese hands, the deal was scaled down to 74%.
This deal was announced a few months after Indian and Chinese armies were involved in a border dispute at Doklam near Bhutan. Gland Pharma had filed its IPO document in July this year, a couple of months after the Galwan Valley clash in the Ladakh region.
Interestingly, the Raju family of Satyam Computers group had 60 lakh shares of Gland Pharma, which are now being transferred to an escrow account. At the upper band of the price band, the shares are worth Rs 900 crore. The company has approached markets regulator Sebi to exempt these shares from being under compulsory post-offer lock-in under current IPO rules.
Kotak Mahindra Capital Company, Citigroup, Haitong Securities and Nomura are managing the offer.