Glenmark Pharmaceuticals Ltd is raising Rs 945 crore ($151 million) through a preferential allotment to Singapore government-owned investment firm Temasek, it said on Friday.
Temasek would subscribe to 10.8 million shares at Rs 875 each. This would give it 3.8 per cent stake in the Indian drugmaker, making it the single-largest institutional investor in the company.
The money will allow Glenmark to deleverage its balance sheet with debt-to-equity ratio expected to slide from around 0.8 to 0.5.
The company has presence in both the generics and formulations as well as in the new molecule discovery segment with a pipeline of as much as seven of them in various stages of development. The company focuses on dermatology, respiratory and oncology as its key domains.
Glenmark generated revenues of Rs 6,007 crore with a net profit of Rs 542.2 crore for the year ended March 31, 2015.
Notably, this is the third-largest private equity deal ever in Indian pharma sector and the top fundraiser in the industry. The two bigger deals involved a heavy secondary component and the actual fund infusion in the companies is estimated to be lower.
KKR invested around $230 million to buy a significant minority stake in Gland Pharma. That deal involved exit of EILSF and also the promoters selling some shares.
The other significant transaction involved Temasek itself. Last year, it acquired a stake in Intas Pharma in a deal where ChrysCap part-exited.
For Temasek, this is the third addition to its India portfolio since January this year after it acquired global venture investor Silicon Valley Bank's Indian venture debt arm and picked a stake in Global Health Pvt Ltd, which runs a large hospital under the Medanta brand in Gurgaon.
In the past, it has also backed others like Bangalore-based Healthcare Global chain of cancer care centres and several others in the pharma space including Aurobindo Pharma, Medreich and Matrix Labs. It has exited all these drugmakers.
(Edited by Joby Puthuparampil Johnson)