Glenmark Generics' IPO to raise up to Rs 600 cr

Glenmark Pharmaceuticals Ltd's subsidiary Glenmark Generics Ltd (GGL), which today filed the draft red herring prospectus (DRHP) with Securities and Exchange Board of India (Sebi) for an initial public offer (IPO), is looking to raise Rs 550-600 crore from the share sale.

Glenmark Pharmaceuticals will keep 70-80 per cent of the equity and there will be a pre-IPO placement with financial institutional investors, according to banking sources having knowledge of the development.

They said the IPO may hit the capital markets within three months. Considering the plans of GGL to raise up to Rs 550-600 crore by diluting about 20 per cent of its 73.2 million equity base, the price band could be in the range of Rs 350-400, sources said.

A Glenmark spokesperson declined to comment.

According to the sources, funds from the IPO would be used to fund the growth plans of GGL, which was hived off as a 100 per cent subsidiary last year.

In the third quarter of 2007-08, Glen Saldanha-promoted Glenmark Pharmaceuticals — one of India's leading research-led pharmaceutical companies — had re-organised its business into specialty and generics to manage the challenges of two diverse businesses that had both attained a critical mass.

As part of the re-organisation, Glenmark had transferred its generics and active pharmaceutical ingredients (API) businesses to the new subsidiary — Glenmark Generics Ltd. GGL, which earns over 75 per cent of its business from the US, has an annual turnover of Rs 985 crore. Glenmark Pharmaceuticals and GGL together have an annual turnover of Rs 2,100 crore.