Gland Pharma Ltd in which Chinese company Fosun Pharma Industrial Pte Ltd holds 74 per cent stake is set to hit the capital market with its initial public offering at a price band of ₹1,490 to ₹1,500 a share (face value: ₹1) on November 9.
At the issue price, it will be one of the largest IPO in the country’s pharma sector where over ₹6,480 crore will be raised.
The IPO comprises of a fresh issue of ₹1,250 crore and an offer-for-sale of up to 3.486 crore shares — 1.936 crore shares by Fosun Pharma and 1.004 crore shares by Gland Celsus Bio Chemicals Private Ltd 35.73 lakh shares by Empower Discretionary Trust and 18.745 lakh shares by Nilay Discretionary Trust.
Bids can be made for a minimum of 10 shares and in multiples of 10 thereafter.
The Hyderabad-based company, which was set up in 1978, has seven manufacturing facilities. “We have cash reserves of over ₹1,500 crore and plan to deploy part of the proceeds to expand some of the company facilities and for possible acquisition in tech related space. We are in the process of further expanding our facilities,” Srinivas Sadu, MD and CEO, said.
The company management clarified the Enforcement Directorate directive to the company not to transfer 3.87 per cent equity held by (B Ramalinga Raju) tainted promoter of erstwhile Satyam Computer Services Ltd, is a decade-old matter and will not impact the IPO.
On China border tensions
The company has clarified that the current border strain with China will not have any material impact on its business. Last fiscal, two thirds of the business was from the US, with India contributing about 18 per cent. Significantly, about 25 per cent of its input sourcing is from China.
The company is one of the fastest growing generic injectables-focused companies by revenue in the US during 2014 to 2019.
It sells products primarily under a business to business model in over 60 countries.
Kotak Mahindra Capital, Citigroup Global Markets, Haitong Securities India and Nomura Financial Advisory and Securities (India) are the Book Running Lead Managers to the Offer.
The equity shares are proposed to be listed on BSE and NSE.