Biocon Unfazed By Weak Market, Gears Up For IPO

Bangalore, Feb 26: | Updated: Feb 27 2004, 05:30am hrs
The current dip in the market is not a worry for Biocon, which opens its maiden issue on March 11, said Ms Naina Lal Kidwai, vice chairman and managing director, HSBC Securities and Capital Markets India Pvt Ltd, speaking at the companys first IPO roadshow in Bangalore.

The price band (of Rs 270-315 per share of face value Rs 5) is based on strong fundamentals and not the volatility of the market, she said.

Biotechnology major Biocon India Ltd will issue 10 million share of face value of Rs 5 each to the public in an IPO which opens on March 11 and closes on March 18. The company will list on the NSE and BSE. The offer would constitute 10 per cent of the fully diluted post issue paid-up capital of the company of Rs 100 crore. The proceeds of the issue will be used to attain a global scale of manufacturing said Biocon CMD Ms Kiran Mazumdar Shaw. The company plans to set up new facilities to augment the submerged fermentation and chemical synthesis capacity to meet the growing demand for biopharmaceutical products like statins, she said.

Out of the 10 million equity shares 60 per cent is for the subscription by institutional investors, 25 per cent for high net worth individuals and the rest 15 per cent for retail investors. Biocons road show will go to Mumbai next, followed by London, Hong Kong, Singapore and Ahmedabad.

The company is looking at the high margin, high entry barrier, regulated markets driven by statins in the short term, insulin and immuno suppressants in the medium term and monoclonal antibodies in the long term, Ms Mazumdar said. The focus on the regulated generic market would be a funding mechanism for its new drug discovery and research programmes, she added.

Biocons equity structure includes 68 per cent for promoters, 15 per cent ESOPs and rest with institutional investors.