China’s Fosun plans D-Street debut for Gland Pharma

Mumbai: China’s Fosun Pharma is planning an initial public offering for its Indian subsidiary Gland Pharma, which could be the first Indian company with a Chinese promoter to make a debut on Dalal Street.

This comes at a time when India and China engaged in a face-off at the Line of Actual Control, following which the Central government took retaliatory economic and trade measures against the northern neighbour. Earlier in April, the Centre barred automatic clearances to foreign direct investment where the ‘beneficial owner’ was from China and other countries bordering India.

The Hyderabad-based Gland Pharma has filed a draft red herring prospectus with capital market regulator Securities and Exchange Board of India (Sebi) for its proposed IPO last Friday. The offer size according to bankers could be around 6,000 crore.

The IPO comprises a fresh issue aggregating up to Rs 1,250 crore and an offer for sale of up to Rs 4,750 crore. While China's Fosun Pharma Industrial Pte is offering to sell 1.9 crore equity shares, Gland Celsus Bio Chemicals is planning to sell 1 crore shares.

Currently, Fosun Singapore — a subsidiary of Shanghai Fosun Pharma — holds a 74 per cent stake in the company. Other investors in the company are Gland Celsus, which owns 12.97 per cent, Empower Trust and Nilay Trust who own 5.08 per cent and 2.42 per cent stakes, respectively. At an issue size of 6,000 crore, comprising both the fresh issue and the offer for sale, the stake of Fosun Singapore will reduce to 58 per cent and that of Gland Celsus will come down to 6.92 per cent.

The company has appointed Kotak Mahindra Capital, Citigroup Global Markets India, Haitong Securities and Nomura Financial Advisory as bankers for the issue.

The company reported revenue of Rs 2,633 crore in FY20, an increase of 29 per cent over FY19. Its profits jumped 71 per cent to Rs 773 crore in FY20.

Gland Pharma develops, manufactures and markets complex injectables. It has seven facilities — four at Hyderabad and three at Visakhapatnam. The company has established a portfolio of products across various therapeutic segments such as anti-diabetics, anti-infectives, anti-malarial, antineoplastics, blood-related, cardiac, gastrointestinal and hormones.