General Atlantic eyes stake sale in Rubicon Research through IPO

General Atlantic eyes stake sale in Rubicon Research through IPO

Private equity firm General Atlantic has initiated talks with investment banks for an initial public offering of its portfolio company Rubicon Research Pvt Ltd, in which it holds a majority stake, sources aware of the discussions told Moneycontrol.

General Atlantic acquired a 58 percent stake in Rubicon Research in 2019. The pharmaceutical products development company is engaged in the manufacturing and export of pharmaceutical formulations in the form of oral solids, oral liquids and nasal. The company has a diversified product portfolio catering to therapeutic segments such as analgesics, antacids, antianxiety, antihistamines, cardiology, neuroscience, and ophthalmic among others.

“The PE firm has been meeting with investment banks over the last two-three weeks to discuss multiple options for the proposed IPO. The talks are at an early stage and appointment of banks is some time away,” said one of the sources.

“General Atlantic is evaluating different options such as selling a large stake in the IPO which will bring its shareholding to below 25 percent so that it will not have to be classified as a promoter of the company. The option being considered is to retain most of its stake, take the promoter tag and look to sell down its shareholding at a later date,” the source added.

Since multiple options are being discussed, the exact quantum of General Atlantic’s stake sale or the size of the IPO is yet to be finalised, the source added.

General Atlantic declined to comment on Moneycontrol’s query.

Also Read: General Atlantic to deploy up to $1 billion a year in India

Rubicon Research Financials

Rubicon Research reported a revenue of Rs 580.8 crore in the nine-month period ended December 31, 2023, with over 95 percent of the revenue being generated from the US generics market, according to a report by credit rating agency India Ratings.

The company reported revenues of Rs 384.7 crore in FY23 and Rs 303.8 crore in FY22.

“Rubicon has a portfolio of 61 abbreviated new drug approvals (ANDAs), of which 51 have been commercialised as on March 31, 2024. According to the management, Rubicon is among the top three companies by market share in 13 ANDAs and has more than 25 percent market share in six ANDAs. RRPL is focusing on the specialty/complex generic segment with 11 specialty products, of which seven have been approved and the remaining are in the advanced stage of approval,” the India Ratings report noted.

Also Read: General Atlantic to acquire majority stake in hospital chain Ujala Cygnus

While the company’s Ebitda (Earnings before interest, taxes, depreciation and amortisation) was weak in FY23 at Rs 18.4 crore and a negative Ebitda of 39.2 crore in FY22, it improved to Rs 86.6 crore in the first nine months of FY24.

“India Ratings expects the Ebitda to improve over FY24-FY27, led by a robust pipeline of niche launches in the regulated markets of the US; and continued demand for its existing products,” the rating agency said.