The Indian multinational biotechnology company, Birla Biotech International Limited (BBIL), is headquartered in Hyderabad and specializes in the discovery and development of pharmaceuticals, vaccines, biotechnological products, and healthcare products.
Established in 1971, Grey Market Premium (BSV) Bharat Serums and Vaccines Limited is a group company. Indian biopharmaceutical corporation BSV ranks among the largest in the country. Known as one of the 10 largest Indian biopharmaceutical companies, TIPL stands out as a leader in the industry. Over 900 people work for BSV, which is based in Mumbai, India. A business segment of BSV is developing manufacturing, and marketing injectable biological, pharmaceutical, and biotechnology products. There are 25 brands in Bharat Serums’ product portfolio. Additionally, monoclonal antibodies, cardiovascular drugs, and anti-equine immunoglobulins/antitoxins. Products from BSV include fertility hormones, antifungals, anesthetics, and plasma derivatives. A major part of BSV’s distribution network is in India, from where it also operates internationally. Furthermore, the group has a comprehensive research and development platform for new drug delivery systems, recombinant therapeutics, biologicals, and equine products, in addition to its commercial operations. In addition to Kotak Private Equity, BSV has secured the investment of Orbimed.
Choosing strategically
IPOs by Indian biotech firms are still few and far between, according to some experts. According to others, some companies may be planning to do an IPO while others may raise money through other means.
Biotech in India began to differentiate itself (from pharma only after Bt cotton was approved). ABLE (Association of Biotech Led Enterprises), an industry group, and MetaHelix Life Sciences Pvt. Ltd., a biotech company, are only in the middle of their first phase of translational research.
Bharat Biotech IPO, which has existed for nine years, has made that strategic decision already. It will develop a pipeline of products, as well as research capabilities through soft loans and grants before launching its public campaign. “Getting money isn’t enough. I need to be able to effectively utilize it. Krishna M. Ella, chairman and managing director of Bharat Biotech, says he won’t consider a Bharat Biotech IPO until three molecules have been developed, though they are at an early stage. The firm has developed three molecules to date, though they are in the early stages of development.
This is an effective strategy among foreign biotech firms that are looking to tap the equity markets only if they have a product in clinical trials, even if they are not making any revenues. According to Rajiv Shukla, executive director of Mumbai’s Avendus Advisors, an investment house that develops only discovery and preclinical (drug) candidates will cause massive volatility to stock prices.
Companies that operate in the biopharma industry are facing tough IPO conditions. Biopharma is the use of biotechnology in pharmaceuticals.
The Indian public market seems to be insensitive to biopharma innovations when it comes to valuing them. Seven’s Life Sciences Ltd. (a Hyderabad-based company specializing in the treatment of central nervous system disorders) has delivered concrete results but is undervalued, says Shukla. As a comparison, Acorda Therapeutics, a similar company operating in the same field, made an IPO in 2006 valued at $500 million (Rs2,214 crore last year) despite losing $30 million, he says. The company’s shares closed Thursday’s session at Rs36.40, resulting in a market capitalization of Rs420.9 crore.
Venture capital that is exclusive
Indian biotech companies will also have to figure out how to break into the IPO market since attracting venture capital is not an easy task.
According to Anuradha Acharya, a Hyderabad-based entrepreneur and promoter of Ocimum Biosolutions Ltd, there are no venture capital funds and investors are extremely risk-averse.
By 2010, Ocimum, a biotechnology company, plans to tap the public market. Acharya, a biotech veteran, suggests companies seek government funding or even apply for debt rather than wasting time chasing venture capitalists. It can be used to build the company,” she says.
Funds are readily available and new technologies are being revived thanks to agencies such as the Department of Biotechnology (DBT), the Department of Science and Technology (DST), the Technology Development Board, and the New Millennium Initiative for Technology Leadership (NMITLI). Several new molecules developed by Bharat Biotech were funded by DBT, NMITLI, and DST.
It is a start, but the Small Business Innovation Research Initiative allows only tiny loans, Narayanan says, saying that Rs20-30 crore would not be enough to fund the entire economy. There is a possibility that he will sell MetaHelix to a public company in 2009 or 2010.
Details of the IPO for Bharat Serum
The IPO date for the IPO of Bharat Serum will probably be at the end of the year.
Bharat Serum IPO Registrar: The details regarding the company registrar are unknown at this time. As soon as the company releases its draft red herring prospectus, it will be known.
The issue date and the allotment status for the Bharat Serum IPO have not yet been announced. A status announcement will be made about 3- 4 weeks after the IPO.
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GMP premium, grey market price, and pricing details for the IPO of Bharat Serum:
- Bharat Serum IPO Price Brand: The offer price will determine the IPO price band.
- Approximately Rs.2000 crore is expected for Bharat Serum IPO.
- Bharat Serum IPO Equity Shares Offerings: The Equity Shares is not released yet. The main managers of the IPO for Bharat Serum are yet to be revealed. When the company releases the draft red herring prospectus, we will know.