Sebi exempts Gland Pharma's 4% Satyam-tagged shares from post IPO lock-in3 min read . Updated: 04 Nov 2020, 02:00 PM IST
- ED has directed Gland to transfer these shares to its demat account and the company is in the process of complying with the directions of the enforcement body
MUMBAI: Hyderabad-based Gland Pharma, which is set to list on exchanges through its ₹6500 crore public issue, has secured an exemption from Sebi on the one-year lock-in of its 3.87% shares that were attached by the Enforcement Directorate in 2010 in the Satyam Computers fraud case.
Around 6 million shares of Gland Pharma, which were held by 10 companies set up by Satyam founder B. Ramalinga Raju, were to be locked-in for a period of 12 months after the IPO as per norms of the Securities and Exchange Board of India (Sebi).
Gland Pharma had approached Sebi for an exemption from the lock-in, according to the IPO prospectus filed by the company. The IPO is the country's largest offering by a pharmaceutical company.
The Enforcement Directorate had asked Gland Pharma to transfer these shares to its demat account.
"The ED, pursuant to its letter dated June 16, 2020 (“2020 ED Letter"), directed the Company to transfer such sub-divided Equity Shares of the aforementioned 10 companies to the demat account of the ED," the company said in its prospectus.
The company is in the process of complying with the directions of the ED, it added.
In August 2010, Gland Pharma received a letter from the ED for attachment of 6,00,000 equity shares (which have been split into 6 million shares now), which were held by 10 companies which were set up by B. Ramalinga Raju and his family members.
The 2010 ED letter was sent by the ED in furtherance to an order dated 21 July 2010 under certain provisions of the prevention of money laundering Act, 2002.
As per the ED order, Gland Pharma was restrained from transferring, disposing or dealing with the attached shares.
"The attached shares represent 3.87% of our pre-offer paid up equity share capital and are currently held by 10 companies that are not related to our company, our promoters, our promoter group, our directors or our key managerial personnel," said Gland Pharma in its IPO offer documents.
The company subsequently filed an exemption application on 10 July with Sebi, seeking exemption from the strict applicability of Regulation 17 of the SEBI ICDR Regulations, specifically in relation to the lock-in of the attached shares for a period of one year from the date of allotment in the offer.
"The application was acceded to by Sebi pursuant to its letter dated 19 October, 2020," said Gland Pharma.
As per the Sebi filing on the IPO, Gland Pharma's promoter Fosun Singapore held 114.66 million shares, which aggregated to 74% of the pre-offer, paid-up equity capital of the company.
Among other shareholders, Gland Celsus holds 12.97%, Empower Trust 5.08% and Nilay Trust 2.42%.
Gland Pharma has set a price band of Rs.1490-1500 for its IPO, which will be launched on 9 November.
At the upper end of the price band the company will be able to raise ₹6,479.54 crore via the public issue.
The IPO comprises fresh issue of shares worth up to ₹1,250 crore and an offer for sale (OFS) of a little over 34 million shares.
The OFS includes sale of up to 19.4 million shares by Fosun Pharma Industrial Pte Ltd, 10 million shares by Gland Celsus Bio Chemicals Pvt Ltd, 3.57 million shares by Empower Discretionary Trust, and 1.87 million shares by Nilay Discretionary Trust, as per the IPO prospectus.
The company said it intends to utilise the fresh issue proceeds of ₹1250 crore for funding incremental working capital requirements, capital expenditure requirements and general corporate purposes.
Gland Pharma sells products primarily under a business to business (B2B) model in over 60 countries as of March, including the United States, Europe, Canada, Australia, India and the rest of the world.
Gland Pharma's promoter Fosun Pharma is a China-based entity. The company will become the first large Indian firm with a Chinese parent to go for public listing.
The Hyderabad-basedcompany, which manufactures and markets complex injectables, filed draft papers with Sebi in July and obtained the market regulator's observation on 19 October to float an IPO.