The Hindu : Biocon to raise $100 m

Online edition of India's National Newspaper
Wednesday, Oct 22, 2003

Business

Business

Biocon to raise $100 m

By Our Staff Reporter

BANGALORE, OCT. 21. Biocon India, the Bangalore based enzymes and bulk drug maker, will raise $100 million, mostly in debt money, to invest in expanding business and building modern production facilities over the next three years, sources said.

The company is to raise about $30 million initially split into two loans, one for $20 million and the second for $10 million.

Biocon already had the "term sheet'' for the first loan from a consortium led by its banker, HSCBC. Others in the consortium included ABN AMRO and Rabo Bank, the sources said.

The company was also in talks with State Bank of India and Canara Bank for the second loan. The $20 million loan, which the company is expected to draw in November-December, would be spent on "research, fermentation and biological'' related facilities, the sources said.

On how much the company expected to garner from its IPO, slated for the first quarter of 2004-05, "it would depend on the `p' value'' the sources said. The company has projected for itself a net profit of Rs. 130 crores for this financial year.

The IPO was "more to offer an exit for venture funds and a few other stake holders'' than to raise operational capital, sources said. The company was expected to use a multiple of 20 on the profits for valuation purposes and dilute about 10 per cent of its equity, the sources said.

The dates for the IPO will be finalised by December. Biocon has chosen DSP Merrill Lynch and Kotak Mahindra Capital Company as Book Running Lead Managers.

In the current financial year the company has been bullish on various fronts, including contract research and contract manufacturing.

The company's exports in bulk include statins and molecules that fight cholesterol. Its recombinant human insulin is expected to hit the markets by March 2004.

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