City’s Gland Pharma eyes India’s biggest sector IPO at Rs 6,500 cr

Hyderabad/Mumbai: At a time when all eyes are on the world’s pharma and

biotech capital

of Hyderabad, where work on multiple Covid-19 vaccine candidates is underway and one of the largest dedicated pharma parks — Pharma City — is being set up, city-based Gland Pharma is coming up with India’s largest ever

pharma sector IPO

to raise around Rs 6,500 crore.

The IPO by Gland Pharma, which was set up in 1978 by

PVN Raju

and is now majority owned by China’s Fosun Pharma group, is also one of the first Chinese majority owned companies eyeing a listing on Indian bourses, especially at a time when a strong anti-China sentiment has been prevailing in the country.

The IPO will see the existing shareholders of Gland Pharma sell shares worth about 80% of the total offer size, while the company will mobilise Rs 1,250 crore for its own use.

On Wednesday, the company said the price band for the IPO has been fixed at Rs 1,490-1,500 per share and the offer will open on November 9 and close on November 11.

So far, the Rs 1,741-crore IPO by

Eris Lifesciences

, which closed in 2017, was the biggest pharma IPO.

Gland Pharma plans to use the proceeds of the IPO for funding its incremental working capital and capital expenditure requirements and for general corporate purposes.

In October 2017, Fosun Pharma was keen on acquiring 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.


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