Reports suggest that Biocon is going to file for Syngene initial public offering (IPO) within next two months. Syngene is the research services arm of the company. Board approved listing of Syngene in Q3FY15.
Speaking to CNBC-TV18, Kiran Mazumdar Shaw, Chairperson and MD, Biocon said the company is committed on getting Syngene listed in FY16. The company will file the DRHP or Draft Red Herring Prospectus in the first quarter of FY16.
Shaw further said that Syngene has good growth prospects and sound business plan and has a baseline valuation of Rs 3,800 crore. Biocon acquired 40 acres of land in Mangalore’s special economic zone (SEZ) for Syngene’s contract manufacturing facility.
Below is verbatim transcript of the interview:
Q: There are certain reports indicating that the company is possibly going to file for the Syngene IPO within the next two months itself. Can you confirm or deny this and just take us through the plans on Syngene as a total for the IPO?
A: You will recall that we had been talking about taking Syngene to the market in fiscal year FY16 and I think we remain committed to that. In terms of whether it is two months or first half of coming fiscal, it is very difficult for me to give you too much clarity on that but all I can say is we do wish to file for this IPO in the first quarter of this fiscal.
Q: You will file the DRHP in the first quarter and overall it should get listed in FY16?
A: Yes.
Q: Have you appointed bankers for the same?
A: Yes, we are in the process of appointing them. Bankers have been appointed.
Q: How much would you be looking to offload? The last time there were indications of around 10-15 percent?
A: We remain in that same ballpark.
Q: Are bankers working with the valuation of may be Rs 3,800 crore that was the latest transaction that took place for Syngene, which was 10 percent which you have sold to your private equity firm for Rs 380 crore?
A: Obviously that is the baseline valuation and when we go to the market obviously we expect it to be higher than this.
Q: Can you give us a sense because since the last valuation of Rs 3,800 crore, it has been close to about six months. How much would the valuations of Syngene gone up by based on the financial performance as well and the interest?
A: It is very difficult for me to give you any indication on that front but obviously Syngene is performing well and has a very good business path and growth prospects going ahead. So obviously the bankers will decide what the optimal price at which we can list.
Q: Do you have any PE players or would anyone else except Biocon look to offload a stake in the IPO?
A: You should wait for the IPO before I can comment on that. This is sort of almost a close period for us and I will not be able to share too many details.
Q: There was some news about you looking at a 40 acre plant in Mangalore maybe for some capex, can you take us through that?
A: This is about acquiring 40 acres in a special economic zone (SEZ) for Syngene’s needs in terms of contract manufacturing.
Q: Is it already acquired?
A: Yes, we have acquired it.
Q: Could you tell us the amount that you might have shelled out for it?
A: I will not be able to give you details but that is not important. What is important is that we have acquired 40 acres and it will involve capex to set up a contract manufacturing facility for many of the molecules and products it is developing for its customers.
Q: Peter Bains has been appointed as the CEO of Syngene earlier this morning. Is that news in line with the structure and the Syngene IPO?
A: Peter Bains has been playing a very important leadership role at Syngene but in the past he has been in a consultative role and this is basically formalising his leadership role as a CEO.
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