Infosys co-founder NS Raghavan and top private equity firm Carlyle-backed life sciences tech player Indegene has filed papers with market regulator Sebi to raise around Rs 3,200 crore via an initial public offer (IPO), multiple industry sources with the knowledge of the matter told Moneycontrol.
If the listing plans fructify, this would be India's biggest enterprise tech/IT services IPO since TCS in 2004 which had an IPO size of Rs 4,713 crore. Interestingly, the filing of papers took place a day after Infosys celebrated its 40th anniversary.
In 1998, co-founder and CEO of Indegene Manish Gupta quit Infosys to set up the firm with four friends during an era when ‘digital transformation’ was not part of the boardroom agenda in several domestic healthcare firms.
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"The e-filing of the DRHP (draft red herring prospectus) has been done with the market regulator. The issue will be a combination of primary and secondary issue of shares," one of the persons above told Moneycontrol.
According to the DRHP viewed by Moneycontrol, the primary issue component consists of Rs 950 crore while the OFS or offer for sale size is up to 36,291,497 equity shares. The proceeds from the IPO would be used to reduce the debt of one of the firm's subsidiaries, funding capital expenditure requirements, general corporate purposes and inorganic growth amongst other aspects.
The selling shareholders in the proposed IPO include Carlyle, the Nadathur family office backed by Infosys co-founder Nadathur S Raghavan, Brighton Park Capital and the promoter group.
A second person familiar with the filing told Moneycontrol that Indegene was a fast-growing firm looking to leverage the huge potential for growth in the under-penetrated life sciences segment.
Both the persons above spoke to Moneycontrol on the condition of anonymity.
Moneycontrol couldn't elicit an immediate response from Indegene.
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Kotak Mahindra Capital (the left lead), Citi, JP Morgan and Nomura are the investment banks working on the IPO. Cyril Amarchand Mangaldas and Shardul Amarchand Mangaldas are the legal advisors.
In February 2021, Carlyle and Brighton Park Capital picked up a minority stake in Indegene for $200 mn. The deal consisted of a secondary sale from existing shareholders of Indegene and a primary investment into the company.
A Closer Look At Indegene
Bangalore-based Indegene is seen as a full-stack digital transformation and tech partner to big pharma companies, global biotech majors and medical device players.
It operates across the drug development and device development cycle cutting across the clinical trial phase, regulatory filings and approvals ( with the US FDA), commercialization and go-to-market, co-commercialisation and pharmacovigilance.
The firm's revenue from operations has grown at a fast pace from $90.84 mn in FY2020 to $130.54 mn in FY2021 to $223.81 mn in FY2022. For the three months ended June 30, 2022, the adjusted Ebitda margin stood at 24.39 percent while the profit margin stood at 16.47 percent. The firm believes that it is well-positioned to benefit from the expected growth in life sciences operations expenditure, which was estimated at $146 bn in 2021 and is expected to grow at a CAGR of 6.3 percent to reach $187 bn in 2025.
The DRHP states that Indegene has established client relationships with 19 of the 20 largest biopharmaceutical companies in the world by revenue for the Financial Year 2021 having earned more than 70.00% of its total revenue from continuing operations for each of the Financial Years 2022, 2021 and 2020 from these 19 customers.
In October 2022, Indegene acquired US-based CultHealth, a full-service healthcare marketing organisation for several life sciences firms.
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