Mumbai: Ahmedabad-based pharmaceutical firm Eris Lifesciences Pvt. Ltd has received approval from the capital markets regulator for its proposed initial public offering (IPO).
The IPO comprises 28.87 million shares through an offer for sale, representing a 21% stake dilution on a post-offer basis. The issue size is estimated at around Rs2,000 crore, valuing the company at Rs9,500-10,000 crore.
Private equity firm ChrysCapital, which holds 16.25% stake in the company, will sell all of its 22.34 million shares, while founder Amit Bakshi who holds 39.97% will sell 0.5%. Other selling shareholders include Rakesh Shah, Rajendra Patel, Kausal Shah and Inderjeet Negi.
The company had filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (Sebi) on 8 February.
Axis Capital, Citibank and Credit Suisse are the bankers to the issue. ChrysCapital had invested about Rs160 crore in Eris in 2011 for a 16% stake. In December 2015, Mint reported that ChrysCapital was planning to exit its five-year-old investment in Eris for around Rs600-650 crore.
Founded in 2007 by sales professional-turned-entrepreneur Bakshi, Eris makes and sells branded generics. It has various products in chronic and acute categories in select therapeutic areas such as cardiovascular, anti-diabetics, vitamins, gastroenterology and anti-infectives. It focuses on developing products linked to lifestyle-related disorders.
The Eris IPO comes at a time when markets have shown a strong appetite for pharma and healthcare firms.
Syngene International Ltd, the contract research services arm of Bengaluru-based biopharmaceutical firm Biocon Ltd, got listed in July 2015 with a Rs550-crore IPO. Alkem Laboratories Ltd went public in December 2015, while Laurus Labs Ltd got listed in 2016.
In the broader healthcare sector, investors have lapped up shares of healthcare services firms such as Dr Lal Pathlabs Ltd, Narayana Hrudayalaya Ltd and Thyrocare Ltd. Their IPOs were subscribed 33, eight and 74 times, respectively.
Some of the other pharmaceutical firms backed by ChrysCapital include Ipca Laboratories Ltd, Torrent Pharmaceuticals Ltd and Cadila Healthcare Ltd.
The IPO will be yet another major exit for ChrysCapital, which has sold shares in Mankind Pharma Ltd and Intas Pharmaceuticals Ltd.
Recently, Mint reported that ChrysCapital part-exited its investment in Intas Pharma by selling about 3% in the company for $107 million to Capital International Private Equity Fund. ChrysCapital, which had a 6% stake in Intas prior to the transaction, will continue to own the remaining stake.
In May 2015, ChrysCapital sold its entire 11% stake in Mankind Pharma to Capital International Private Equity Fund at close to 10 times the value of its original investment.
The deal was closed at $215 million. ChrysCapital had invested $24 million in 2007 for the stake.
In November 2014, ChrysCapital sold a 10.2% stake in Intas Pharma to Temasek Holdings Pte Ltd at close to 10 times its original investment. While the fund did not disclose the details of the transaction at the time, Mint had reported that the stake was sold for Rs880 crore.