Poonawalas to shed 20% stake in Serum Institute

Alka Kshirsagar Pune | Updated on January 24, 2018 Published on June 23, 2015

Adar Poonawala, ED, Serum Institute

Shelve IPO plan; to raise up to ₹15,000 cr to grow realty, other verticals

The Poonawala Group has decided to sell 20 per cent of its stake in Serum Institute of India Ltd (SIIL), billed as the world’s largest vaccine maker by volume. The Group is looking to raise ₹12,000-15,000 crore through the sale.

The money will be used to fund the billionaire Cyrus Poonawala-led Group’s initiatives in real estate and other verticals, Adar Poonawala, Executive Director, SIIL, told Business Line. The move brings down the curtain on plans to go public and raise money through an IPO.

“We will divest 20 per cent in Serum and keep the money we raise for acquisitions. We would only be interested in a long-term fund that would hold it on and then, at the most, sell it to another fund, but not take us public. We don’t want to go public because we don’t want to lose the flexibility and waste our time reporting everyday on what we are doing,” Adar Poonawala said.

Benchmarking the company against pharma majors Sun Pharma and Cipla in terms of profits and market cap, Adar Poonawala felt it would be fair to value SIIL between ₹70,000 crore and ₹80,000 crore. On this basis, the 20 per cent stake sale could fetch ₹12,000-15,000 crore.

“The finance guys are talking to some people. I don’t want to say who we are in discussions with but you can talk about the top PE funds. “In fact, I am looking for partners who are not just PE guys — they generally like to exit after five years. We are looking at, maybe, a pension fund or a fund from Singapore or Abu Dhabi, or anyone else who has the power to stay for long.”

Asked when this would happen, Poonawala said, “Right now the valuations are good for pharma companies. So this will be a good time to talk about it.”

Published on June 23, 2015

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