Temasek might invest in Intas

Sources say Temasek Holdings is in discussion to invest Rs 920-1,100 crore for acquiring a significant minority stake

Intas Pharmaceuticals is in discussion with private equity (PE) investors for another round of funding, after drawing back for a second time from floating an initial public offering (IPO).

According to sources, Temasek Holdings, the Singapore government-owned sovereign fund, is in discussion to invest $150-180 million (Rs 920-1,100 crore) for acquiring a significant minority stake. The Ahmedabad-based pharma company is expected to use the money for expansion and a partial exit for the existing PE investor, ChrysCapital, which has about 16 per cent.

Intas had filed a draft red herring prospectus (DRHP, the draft of a preliminary prospectus for vetting, one without details of price or number of shares being offered) for a Rs 230-crore IPO with the market regulator in June 2013; it is still to be floated. This was being done for a second time; it had previously filed a DRHP for a proposed issue worth Rs 425 crore in March 2011.

ChrysCapital's Fund-III had in 2006 acquired about 10 per cent in Intas for Rs 53 crore. Its Fund-V had then invested Rs 300 crore for another six per cent stake in 2012. ChrysCapital is expected to retain six per cent in Intas and sell the rest, said sources.

Asked for confirmation, a Temasek spokesperson said the company did not comment on market speculation. Jayesh Shah, chief financial officer at Intas, did not respond to emails.

December 2013 saw large PE deals in the pharma and health care segment, such as the $200-mn KKR-Gland Pharma, $158-mn Carlyle-Medanta Medicity and the $114-mn Blackstone-Emcure Pharma.

Temasek is an established investor in India. It has presence in health care through a stake in Medreich Pharma, where it bought 25 per cent stake for Rs 110 crore in 2005. It is reportedly in discussion with strategic and PE investors for exiting the portfolio.

According to Intas, it had grown to be a $650-million (Rs 4,000 crore) organisation as of March 31, 2013, with a compound annual growth (CAG) in revenue of a little over 30 per cent over the past five years and a CAG in profit of 50 per cent over the period.

In India, Intas has strong presence in the treatment areas of the central nervous system, cardiovascular system, diabetology, gastroenterology and pain management. Recently, it extended its presence into other therapy areas such as gynaecology, infertility and respiratory care. Intas is also present in a little more than 70 countries worldwide, according to its website.

December 2013 saw large PE deals in the pharma and health care segment, such as the $200-mn KKR-Gland Pharma, $158-mn Carlyle-Medanta Medicity and the $114-mn Blackstone-Emcure Pharma.