The market for exits appears to be hotting up. ChrysCapital Investment Advisors, the fund which manages $2.5 billion, is understood to be scripting an exit from its portfolio company Intas Pharma after staying invested for nearly five years, sources familiar with the development said.
At this point, it is not clear what exit route ChrysCapital would take. In 2005, the fund invested $11.49 million from ChryCapital III LLc in Intas Biopharma by acquiring 12.47% stake from ICICI Venture.
Jayesh Shah, CFO, Intas Pharma said, "As of now, ChrysCap has no exit plans." There is nothing concrete on the IPO front right now. But we are keen on entering the stock market, he added. A mail sent to Ashish Dhawan, founder & senior managing director, ChrysCapital Investment Advisors, did not elicit any response at the time of posting this story.
Intas claims to be ranked 16th among Indian pharma players. For 2008-09, Intas Pharma registered sales of Rs 1,156 crore with a PAT of Rs 117 crore. Its other group companies are contract research firm Astron Research Ltd, biopharma firm Intas Biopharmaceuticals Ltd and a marketing subsidiary Accord Healthcare Ltd.
Incidentally, there has been a development related to Intas Pharma’s Canadian partner Orbus Pharma Inc, which recently obtained protection from its creditors under the provisions of the Bankruptcy and Insolvency Act. Orbus has long term secured debt to the tune of $11 million. Now, in November last year, it had executed a Memorandum of Agreement effective March 30, 2010 with Intas Pharma for the sale of its share of worldwide rights (excluding US and China) for metoprolol succinate extended release tablets (used for hypertension). Orbus has received an initial net payment of $755,000 with a balance of $395,000 payable on successful transfer of the technology for manufacturing the 195 mg. and 95 mg. product strengths to an Intas manufacturing site. Jay Shah maintains that the deal with Orbus is almost concluded and there were no concerns over this development.
Intas Pharma arm Intas Biopharma too is on fund-raising mode. In April, VCCircle had reported that Tata Capital plans a $10-million investment in Intas Biopharmaceuticals Ltd, which specialises in making biopharma products focussed on the oncology space. Kotak PE is an existing investor in Intas Biopharma with a $10-million investment.
Chryscapital's current portfoilo includes Axis bank, Bajaj Auto Finance, Hathway, Idea Cellular, Mahindra Finance and Mankind Pharma.
With the bounce-back in the stock markets, several PE firms including ChrysCapital started selling out their stakes in listed portfolio firms. In March 2010, ChrysCapital exited its one-year-old investment in Ahmedabad-based Zydus Wellness with an estimated return of 4.7X. ChrysCap bought 1.38% stake in Zydus Wellness at an average Rs 70/share in February 2009 and exited at Rs 330/share. ChrysCapital is learnt to have made a partial exit from its investment in Hathway Cables through the IPO. ChryCapital, which held 13.3% in Hathway, sold out about 7%.
In November last year, VCCircle reported that ChrysCap earned more than Rs 1,400 crore on the Rs 100-120 crore investment it made five years ago through its exits since February 2009 from Shriram Transport Finance Company (STFC), a Chennai-based commercial vehicle financier, netting a multiple of around 11-12x.
According to VCCEdge, out of the total exits made by ChrysCap since 2005, 11 were through merger & acquisitions, 17 through open market, two via IPO and three by way of secondary sale to PE investors.
The pharma and healthcare space too have witnessed quite a few exits through open market sales this year. Volrado Venture Partners exited Ess Dee Aluminium ($1.97 millionn), Citi Venture Capital International exited Jubilant Organosys through a $13.57-million deal while Strategic Ventures Fund exited Shilpa Medicare for $7.5 million, according to data from VCCEdge.