IVFA-backed Syngene makes strong market debut, ends day 1 with 24% gain

Syngene International Ltd, the research and development subsidiary of Indian biopharmaceutical major Biocon Ltd, made a strong debut on the stock exchanges, listing at a premium of 18 per cent to its issue price of Rs 250 and ended the first day Rs 310.4 a share, up over 24 per cent in a weak Mumbai market on Tuesday.

Shares of the company touched an intra-day high of Rs 318.2 on BSE.

Syngene had priced its issue at the upper end of the Rs 240-250 a share price band after it raised Rs 550 crore in the recently concluded initial public offer (IPO). The issue was oversubscribed 31 times.

Earlier, Singapore's GIC, one of the most active sovereign wealth funds in the country, had come in as one of the anchor investors in Syngene. These anchor investors together invested Rs 150 crore in the firm.

GIC put in Rs 25 crore while others such as funds managed by Goldman Sachs, Morgan Stanley and Deutsche Bank besides other foreign portfolio investors and a few domestic mutual funds invested the balance Rs 125 crore.

In the public issue, Biocon sold 22 million equity shares (including anchor allotment portion) through an offer-for-sale comprising 10 per cent of the company.

Biocon had announced in January that it would list Syngene by selling up to 15 per cent of the unit through the public offer. Since the entire issue comprises an offer-for-sale, Syngene did not receive any money and the entire amount went to its separately listed parent.

In September 2014, mid-market private equity firm India Value Fund Advisors (IVFA) picked 10 per cent stake in Syngene for Rs 380 crore, valuing it at Rs 3,800 crore. Post IPO, its stake is now valued at Rs 630 crore and it is sitting on 66 per cent unrealised gains on its under one-year-old investment.

It had bought the stake from Biocon Research Ltd, a wholly owned subsidiary of Biocon.

IVFA had previously invested in Biocon in May 2003 and later exited in 2004, soon after the company went public and got listed.

Syngene is a contract research organisation (CRO), offering a suite of integrated, end-to-end discovery and development services for novel molecular entities (NMEs) across industrial sectors, including pharmaceutical, biotechnology, agrochemicals, consumer health, animal health, cosmetic and nutrition companies.

Axis Capital, Credit Suisse Securities and Jefferies India were the bankers in the IPO.

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