Eris Lifesciences IPO launch on 16 June
The Eris Lifesciences IPO will see PE firm ChrysCapital sell its entire 16.25% stake in the pharma firm while founder Amit Bakshi will pare 0.5% of his stake
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Mumbai: Ahmedabad-based pharmaceuticals firm Eris Lifesciences Pvt. Ltd will launch its initial public offering (IPO) worth Rs2,000 crore on 16 June, two persons aware of the development said.
Private equity firm ChrysCapital, which holds a 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 his 0.5% stake. Other investors including Rakesh Shah, Rajendra Patel, Kausal Shah and Inderjeet Negi too will sell their shares.
Eris, which filed its share sale prospectus with the Securities and Exchange Board of India in February, received the regulator’s approval in May. Axis Capital, Citibank and Credit Suisse are the bankers to the issue.
Founded in 2007 by sales professional-turned-entrepreneur Bakshi, Eris Lifesciences makes and sells branded generics in select therapeutic areas and focuses on developing products linked to lifestyle-related disorders.
“On a larger basis, there is a scarcity for IPOs by pharmaceutical companies in India and about 2-3 IPOs are being launched in a decade. So, there are always good potential for the IPOs of pharma and healthcare companies in India,” Bakshi told Mint.
For ChrysCapital, an active investor in the Indian pharmaceutical and healthcare space, Eris Life IPO will give another exit with a good return. ChrysCapital, which invested about Rs200 crore in Eris in 2011 for a 16.25% stake, will make about Rs1,400 crore through its exit, reaping seven times return, said the first of the persons cited earlier, on condition of anonymity. A ChrysCapital spokesperson declined to comment.
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 the value of 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.
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.
Pharmaceuticals and healthcare remain a safe bet for PE investors due to the high returns.
Several PE-backed pharmaceutical companies had listed with good investor response.
In December, Laurus Labs Ltd’s Rs1,330 crore IPO was subscribed 4.5 times, while IPOs of Alkem Laboratories Ltd and Syngene International Ltd were subscribed 44.29 times and 32 times, respectively, in 2015. Investors have also shown interest in healthcare services firms such as Dr Lal Pathlabs Ltd, Narayana Hrudayalaya Ltd and Thyrocare Ltd, with their IPOs being seeing subscription rates of 33, eight and 74 times, respectively.