NEW DELHI: Gland Pharma Ltd has set the price band for its initial public offering at ₹1,490-1,500 per share. The issue opens on November 9.
The company plans to lift up to ₹Rs 1,250 crore by issuing new shares and allowing its China-based promoter Fosun Pharma Industrial Pte Ltd and current shareholder Gland Celsus Chemicals Pvt Ltd to sell a portion of their stake.
The company will hold a press conference today to provide additional details on the IPO.
According to the red herring prospectus filed with the Securities and Exchange Board of India, while the company plans to increase ₹Rs 1,250 crore, it will also have an offer for sale of up to 34.9 million shares. Of these, Fosun Pharma will sell up to 19.4 million, while Gland Celsus will sell 10,047,435 shares. The rest will be sold by two trusts that are also continuing shareholders of the company.
Of the total shares, no more than 50% of the participation will be granted in qualified institutional placements, while at least 35% will be available to retail investors. The rest will be available for subscription by non-institutional bidders.
Shanghai-based Fosun acquired a 74% stake in Gland Pharma in 2017 for more than $ 1.2 billion, in what was then the largest acquisition of an Indian company by a Chinese company.
Gland Pharma is a prominent generic injectables focused company and one of the fastest growing in the segment by revenue in the US from 2014 to 2019, according to company filing.
Established in Hyderabad in 1978, the company is present today in sterile injectables, oncology, and ophthalmology and also focuses on complex injectables and first-time opportunities among others.
For the fiscal year to March, the company reported revenues of ₹2,772.4 crore, compared to ₹Rs 2,129.7 million in the previous year. In 2019-20, it reported a gain of ₹772.8 million rupees against a gain of ₹451.8 million rupees in the previous fiscal year.
In 2019-20, roughly two-thirds of its revenue came from the world’s largest pharmaceutical market, the US, with around 18% coming from India.
The IPO comes at a time when relations between the two neighbors are on the ground after the deadly border clashes in June. As a consequence, India banned various Chinese apps and restricted the flow of Chinese capital and goods to India.
All investments from China and Hong Kong must be subject to government scrutiny and approval. This has severely slowed down the flow of Chinese capital to Indian companies, especially tech startups.
However, it seems unlikely that Gland Pharma’s IPO plans will be affected by diplomatic tensions between the two neighbors.
Kotak Mahindra Capital Co. Ltd, Citigroup Global Markets India Pvt. Ltd, Haitong Securities India Pvt. Ltd and Nomura Financial Advisory and Securities (India) Pvt. Ltd are advising the company on the IPO.
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