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Biocon gears up for India's first biotech IPO
By siliconindia staff writer
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Friday, 13 February 2004, 20:30 IST
BANGALORE: Biocon Ltd is all set to become India's first biotechnology initial public offering, aiming to grow 30 percent a year.
Founder Kiran Mazumdar Shaw said she felt Biocon was key to the sector in India.
Biocon is India's largest biotech company with an estimated revenue of Rs 5.5 billion ($122 million) and net profit of Rs 1.2 billion to Rs 1.3 billion in the year ending March 2004, up from Rs 2.83 billion and a profit of Rs 422 million a year earlier.
If Biocon's shares were to begin trading at a price to earnings multiple of around 10, the company would be worth around Rs 12.5 billion ($275 million). India's biggest listed drug companies trade at multiples of around 20 times.
Biocon aims to have $1 billion in revenue within a decade, with solid growth expected in the next five years.
"In broad terms, I would definitely put growth at 30 per cent per annum," Mazumdar said.
Biocon aims to use the IPO to raise its profile and fund a Rs 4.13 billion expansion of cholesterol-lowering statin manufacturing facilities at an 80-acre (32-hectare) campus on the outskirts of Bangalore.
An exact indication of Biocon's valuation or share price is not available as the company and lead managers are awaiting regulatory approval on the issue document.
Apart from making enzymes and statins for the US and European markets, the 1,200-employee company has two subsidiaries that provide outsourced research services to cash in on India's low-cost scientific manpower.
Biocon's Clinigene International unit conducts clinical trials, while Syngene does contract research for drug discovery by global clients such as AstraZeneca and Pfizer.
But more than 90 per cent of revenue at Biocon, in which a fund owned by US insurer American International Group controls 10 per cent, comes from enzymes or biopharmaceuticals, which it started making in 1998.
Clinical trials are in the final phase for Biocon's human insulin, which is expected to hit the market before July.
Biocon plans to issue 10 million shares, equivalent to 10 per cent of its post-issue capital. Mazumdar would directly control about 40 per cent of the stake after the issue.