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IVFA-backed Syngene’s IPO oversubscribed 31 times

29 July, 2015

Syngene International Ltd, the research and development subsidiary of Indian biopharmaceutical major Biocon Ltd, saw its initial public offer (IPO) covered 32 times or recorded oversubscription of 31 times at the end of the issue.

The bumper subscription was led by bids from high net-worth individuals (HNIs) and corporates who applied for 90 times the number of shares reserved for them. Institutional and retail investors, who had oversubscribed to their portion of the issue on day 2 itself, ended with oversubscription of more than 50 times and four times, respectively.

While some IPOs barely managed to clear the ropes early this year, some of the more recent issues found takers despite volatility in the secondary market. In April, goods and passenger transport services provider VRL Logistics Ltd’s public float with 73x oversubscription. This was the biggest oversubscription number in seven years for a primary market issue beating Reliance Power’s issue in February 2008.

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. The issue was subscribed 33 per cent at the end of day 1 and was fully covered at the end of day 2.

Biocon had announced in January this year 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 would not receive any money and the entire amount will go to its 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.

It bought the stake from Biocon Research Ltd, a wholly owned subsidiary of Biocon, through purchase of existing shares held by BRL. Post the completion of the transaction, Biocon and BRL jointly hold 85.54 per cent stake in Syngene.

The PE firm is sitting on an unrealised gain of 45 per cent on its under one-year-old investment at the upper end of the issue price band.

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 are the bankers in the IPO.


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IVFA-backed Syngene’s IPO oversubscribed 31 times

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