Biocon may trim more of Syngene pie

Biotechnology company Biocon is likely to monetise more of its investments in its contract research services arm Syngene International, besides looking at demerger of the arm. 

“Biocon is reducing its stake to 74 per cent from 84.5 per cent through the initial public offering (IPO). We would look at monetising more investments in Syngene going forward at an appropriate time,” Biocon chairman and managing director Kiran Mazumdar Shaw said.

A demerger of Syngene is also on the cards as and when the dependence for Biocon on Syngene becomes less, Shaw said. She, however, added that no timeline has been set for the demerger and it is unlikely to happen in the next 3-4 years.

IPO window: July 27-29
Meanwhile, the IPO of Syngene International will hit the markets from July 27-July 29 with a price range of  Rs 240–Rs 250 per share. Biocon, along with its subsidiary Biocon Research, currently holds 84.5 per cent stake in Syngene, which has 200 million equity share outstanding. 

The offer will constitute 11 per cent of the post offer paid-up equity share capital of Syngene, and this includes a reservation of two million equity shares for subscription by Biocon shareholders.

The net offer (the offer minus the Biocon shareholder reserved portion) will constitute 10 per cent of the post offer paid-up equity share capital of Syngene. Axis Capital, Credit Suisse Securities (India) Private, and Jefferies India Private are the book-running lead managers to the issue and Karvy Computershare Private is the registrar.

According to Syngene chief executive officer Peter Bains, the company will continue to derive a majority of its revenues from overseas markets. 

“Some 95 per cent of our revenues are from outside India. We see that trend remaining intact as our business focuses on new chemical entities (NCEs), growth for which is majorly outside the Indian markets, including countries like the United States and Japan,” Bains said.