Mumbai: Warburg Pincus Llc-backed generic drug maker Laurus Labs Ltd is likely to launch a Rs1,000 crore initial public offering (IPO) by the end of the month, said two people aware of the development.
“The company is currently on international investor roadshows in the US and other geographies. So far, the response to the roadshow has been strong," one of the two people quoted above said, requesting anonymity.
“The company is looking at a timeline towards the end of November for the launch. Bankers expect markets to stabilize by then following the US presidential election results," the person said.
Laurus will raise about Rs300 crore of primary capital by issuing fresh shares in the IPO. The investors, Warburg Pincus and Eight Roads Ventures, will sell a part of their stakes in the company through the IPO, fetching them up to Rs700 crore.
Laurus intends to use the proceeds of the IPO to repay debt and for other corporate expenses.
Warburg Pincus invested Rs550 crore in Laurus Labs in 2014 and holds a 30.41% stake.
PE firm Eight Roads, which invested in Laurus Labs in 2012, owns an 18.7% stake in the company.
Emails sent to Warburg Pincus and Laurus Labs remained unanswered. PE firm Eight Roads declined to comment.
The Hyderabad-based firm filed IPO papers with the Securities and Exchange Board of India (Sebi) in August. On 17 October, it received the market regulator’s approval to go ahead with the share sale.
Laurus Labs makes active pharmaceutical ingredients (APIs) for select, high-growth therapeutic areas of antiretrovirals and Hepatitis C. It also manufactures APIs used in oncology and other therapeutic areas.
Laurus Labs has launched 59 products since its inception in 2005. The firm’s key customers include Aspen Pharmacare, Aurobindo Pharma Ltd, Cipla Ltd, Mylan Laboratories Ltd, Natco Pharma Ltd and Strides Shasun Ltd.
It currently operates three manufacturing facilities in Visakhapatnam and two research and development (R&D) centres—one in Hyderabad and another in Boston, US.
According to data from the company’s draft prospectus filed with Sebi, for 2015-16, Laurus Labs reported revenue of Rs1,788.4 crore, up from Rs1,360.3 crore the previous year. In 2015-16, the company posted profit of Rs143.5 crore, up from Rs73.5 crore in the previous year.
Between 2011-12 and 2015-16, Laurus’s revenue has grown at a compound annual growth rate of 41%.
So far this year, 24 companies have raised Rs.24,940.8 crore through the IPO route.
In 2015, 21 companies had raised Rs13,614 crore through initial share sales, according to the data from primary market tracker Prime Database.
Public market investors have shown keen interest in healthcare and pharmaceutical IPOs in recent times.
In December, when Alkem Laboratories Ltd went public in a Rs1,350 crore IPO, the share sale was subscribed almost 44 times. The stock went on to list at a premium of 31.4% on the stock exchanges.
Last month, Mint reported that PE firm ChrysCapital-backed pharma firm Eris Lifesciences Pvt. Ltd had hired investment banks for a $200 million (about Rs1,300 crore) IPO.