BTS India Private Equity-backed pharmaceutical firm Parabolic Drugs has made a disappointing debut on the stock exchange. Although the scrip opened at Rs 76, a tad higher than its issue price of Rs 75 a share, in early morning trade it has slipped and is trading around 12% discount to the issue price.
The Chandigarh-based manufacturer of APIs and API intermediates raised a total of Rs 200 crore in the IPO that included partial exit by BTS along with another financial investor Alden Global.
BTS had originally invested Rs 25 crore through cumulatively compulsorily convertible preference shares in April 2008 which got converted into equity last October. After accounting for bonus issue thereafter, BTS’ average cost of acquisition of shares through this deal works out to be around Rs 54.3. However, it appears BTS also participated in some secondary transaction to buy more shares. The exact cost of purchase in unclear.
Pre issue BTS owned 70 lakh shares of Parabolic representing 19% stake of which it sold 15.3 lakh shares (a third of shares it acquired under the direct purchase) in the public issue. Similarly, Alden had invested Rs 4 crore in July 2006 which was converted into equity in March 2008. Its average cost of purchase of shares in this investment works out to Rs 33.3 a piece. Alden holds
14.75 lakh shares of which Rs 12 lakh was through its direct purchase, details of its other share purchase is unavailable.
Founded in 1996 by first generation entrepreneurs Pranav and Vineet Gupta, Parabolic is into manufacturing of bulk drugs on contract. It has two manufacturing facilities at Punjab and Haryana. For the six months ended September’09, Parabolic had net sales of Rs 232 crore
with net profit of Rs 12.4 crore.
Parabolic planned to use the proceeds of the issue to set up some new production units at its existing plants besides setting up a new plant and retiring loans.