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Avesthagen plans pre-IPO of USD 50 Mn from PE investors, IPO Next year

Biotechnology company Avesthagen Ltd plans to raise Rs 850-950 crore next year, and this includes a revived public issue plan and overseas funds.

Of this, the company would raise Rs 600-700 crore from an initial offer in the first half of 2010.

“[Funding] is going to be on two channels. In addition, we are also looking at raising a PE/pre-IPO overseas fund of $50 million [around Rs 250 crore], perhaps early next year, and have appointed US investment bankers to look into it,” Dr Villoo Morawala-Patell, Founder and Chairman and Managing Director of Avesthagen, told Business Line.

This fiscal, Avesthagen expects to reach a turnover of Rs 100 crore from research and sale of nutrition products, among others. The company holds 560 patents and expects to license some of its plant-derived nutritional and therapeutic molecules and ingredients. “Many people are interested in our molecules and products,” she said.

Dr Patell said she would retain the promoter stake of 32 per cent. Of the ten-odd investors, private equities hold 28 per cent. They include ICICI Ventures, Fidelity and New York Life Investment Management India Fund.

Finalising plans

Last year, Avesthagen was midway through the exercise and about to file its draft prospectus but pulled back when market conditions turned adverse.

The money from the IPO would be used to commercialise 40 products that are under development. The draft red herring prospectus for the public issue would be filed early next year, the Bangalore-based company said in a news release. The bankers are yet to be finalised.

It cited Dr Patell as saying, “The IPO is slated to coincide with the time that our biosimilars [medicine equivalents] are ready to hit the market place. From an investment perspective I believe mid-2010 will see a global turnaround and a good business environment such that all our stakeholders will benefit from investing in the company.”

Cipla, which was to commercialise the biosimilars, recently parted ways with Avesthagen citing R&D delay. Dr Patell said, “We will build our own brand in India, as we are doing with our functional foods [nutri-bars] and bioactives. We are open to partners on a non-exclusive licensing basis. For the international market, we would look for a global partner.”

Recently, the national regulator cleared one mammalian biosimilar monoclonal antibody product for clinical trials. Three other biopharma products have entered the pre-clinical stage.

Each of the four business units are expected to run as independent profit centres with dedicated management teams.

Source: Sify

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