Syngene IPO price band at Rs 240-250

Company expects to raise around Rs 550 crore

Syngene International, the contract research services arm of Biocon, the Bengaluru-based biopharmaceutical company, announced the launch on Thursday of an Initial Public Offer of its equity.

An IPO is a process wherein people can buy shares in a company. The price band for the offer is Rs 240-250, between July 27 and 29. The company is looking to sell 22 million shares. This would set the IPO size up to Rs 550 crore, at the higher end of the band. This IPO is an offer for sale, meaning the money raised goes to the selling shareholders, not the company. Biocon is selling part of its stake.

“We believe Syngene has earned a global reputation in the area of integrated discovery and development services for novel small molecules and biologics,” said Kiran Mazumdar-Shaw, chairperson and managing director of Biocon. At the lower end of the IPO price band, the company  is valued at Rs 4,800 crore. This is half of Biocon's current market capitalisation, though Syngene contributes about 27 per cent to consolidated revenue.

SYNGENE IPO IN A NUTSHELL

• Issue constitutes 10% of post-offer capital
• Offer for sale by Biocon, cash will not go to Syngene
• Maximum valuation of company works out to Rs 5,500 crore
• 35% of offer available to retail investors
• Price-band at Rs 240-250, opens from July 27

Biocon had earlier given a revenue target for the group of $1 billion by FY18, with the Syngene contribution pegged at $250 million or Rs 1,550 crore. The latest annual revenue for Syngene, which provides research services to pharmaceutical and biotech entities, in addition to other sectors  is Rs 872 crore and the (restated) profit was Rs 175 crore, according to offer document. Peter Bains, chief executive of Syngene said revenues over the past five years had grown at annual rate of 28 per cent.