Biocon's arm Syngene gets Sebi nod for IPO

Syngene International, research arm of biotechnology major Biocon, has received capital markets regulator Sebi's approval to launch an initial public offer (IPO).

The company had filed its draft red herring prospectus (DRHP) with Sebi through its lead merchant banker Axis Capital in April.

Securities and Exchange Board of India (Sebi) issued its final observations on the draft offer documents on June 12, which is necessary for companies to launch any public offer.

As per the draft papers, the company plans to sell 22 million equity shares, including reservation of up to two million shares for Biocon shareholders, through an offer for sale.

While the company did not comment on the amount to be raised through the IPO, sources said it could be around Rs 600 crore.

The stake dilution will be 11 per cent of the post-issue diluted equity capital of Syngene.

Of the total shares on offer, 50 per cent has been reserved for qualified institutional buyers, 15 per cent for high net worth individuals and the rest for retail investors.

In April, Biocon CMD Kiran Mazumdar-Shaw had said that the listing could be by July if all the approvals come on time.

In January, Biocon concluded a sale of 10 per cent stake in Syngene for Rs 380 crore to IVF Trustee Company. The deal had put the entire valuation of Syngene International at Rs 3,800 crore.

The public listing of Syngene, which offers integrated drug discovery and development services with capabilities in medicinal chemistry, biology, in vivo pharmacology and toxicology has been much-delayed.

The plan had remained unexecuted since 2012 due to uncertainties in the global and domestic economic environment. Syngene has a research team of 2,300 scientists.