Biocon is planning to get its subsidiary Syngene listed on Dalal Street. The company owns 86 percent stake in Syngene and is expected to raise Rs 1,000 crore by hitting the primary markets. Speaking to CNBC-TV18, Kiran Mazumdar Shaw, CMD, Biocon said the company has filed the Draft Red Herring Prospectus (DRHP) Wednesday and if everything goes on track, Syngene will be ready to get listed around July.
Biocon will be offloading at least 10 percent of Syngene equity as it needs funds to support some of its Research and Development (R&D) programmes, added Shaw.
Below is verbatim transcript of the interview:
Q: Have you filed the DRHP for doing an Initial public offering (IPO) for Syngene?
A: Yes. We have just done that earlier today.
Q: What is the amount you are looking to raise, how much will Biocon divest and how much will you issue in the form of new shares?
A: You will have to wait for some of those facts to come out in the next few days because right now we have to go through the formalities of filing with Securities and Exchange Board of India (Sebi), getting their approval, getting Foreign Investment Promotion Board (FIPB) approval and only then can we actually share with you all the other details.
Q: Do you have to take FIPB approval before you file with the Sebi?
A: No, we also have to get FIPB approval and so, there are two approvals that we need.
Q: How is Syngene poised at present and funding requirements if any and how you view the business overall?
A: This is going to be Biocon offering its shares for sale so Syngene really does not require to raise any funds as such but this is about Biocon monetizing its shareholding in Syngene to a certain extent because we need funds to support some of our R&D programmes and that is the reason why we are doing it.
Q: What is your fund requirement, how much are you looking to raise?
A: You will have to wait for a while because you will get all that. We have mentioned in the past it will be a minimum of 10 percent of our shareholding.
Q: That is what I was coming to because there have been different reports indicating that you could be selling as much as 15 percent as well.
A: You will have to wait, I can’t share all the information with you but this is as best as I can disclose.
Q: When you first got 10 percent into Syngene your valuations were Rs 3,800 crore for the entire company. Have valuations improved, what are you looking at by way of valuations now?
A: We certainly expect that it will be higher than the previous level.
Q: Any ball park figure?
A: Be patient you will get to know what the offer price is.
Q: What is the timetable you are looking at, when will the approvals come and when will the DRHP be filed and when will the issue hit the street?
A: If all goes well we should be able to list sometime in July because Sebi takes 45 days to give approval. Then it depends on the FIPB approval but hopefully, if everything goes on track then we should be ready to list around July.
Q: An IPO for Syngene has been in the pipeline for some time now. Your sense on the timing why now and just a quick overview on the business and since you are expecting valuations to improve over the deal we saw last year, your outlook on the company?
A: Syngene has enjoyed a very robust and steady growth and we as a company want to ensure that we keep seeing this positive trajectory and we felt that this was a time that Syngene was now ready to go to the market.
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