Ahmadabad-based specialty pharmaceutical company Eris Lifesciences is learnt to have started preparations to launch its IPO which would allow private equity investor ChrysCapital to exit. A report by the Mint business daily said the company has hired three investment banks to manage the share sale. Axis Capital, Credit Suisse Securities India and Citigroup Global Markets India will be managing Eris IPO.
Following the finalization of the merchant banks, draft prospectus will be submitted with market regulator SEBI and the IPO can only be launched after getting necessary approval from the regulator. Depending on the clearances, Eris IPO may be floated in the first half of 2017.
ChrysCapital had invested nearly INR160 crore (INR1.6 billion) in Eris Lifesciences in 2011. The investment, equaling 16% of the company’s equity capital, is likely to have turned into a multibagger for ChrysCapital. Mint reported that Eris IPO will mobilize INR1,300 crore while a Times of India report said the share sale will raise INR2,000 crore. ChrysCapital owns nearly 16.3% in Eris Lifesciences and plans to completely exit the investment through the IPO. The IPO will value the company in excess of INR10,000 crore.
Started by Amit Bakshi in 2007, Eris Lifesciences has made inroads in the high margin super-specialty niches such as diabetes and hypertension. Unlike most other pharma players, Eris has no export operations. Amit Bakshi started the company after spending nearly 12 years in the industry at Torrent Pharma, Ely Lilly and Intas. In less than a decade, Eris Lifesciences has achieved a scale of INR800 crore in annual revenues with an industry-beating net profit margin of 25%.
Eris IPO to cash on ‘health is wealth’
Indian investors have preferred pharma and healthcare stocks amid a surging stock market. Last year, generics player Alkem Laboratories raised INR1,350 crore through its IPO which went on to generate excellent returns for IPO investors. Healthcare IPOs such as Dr Lal Pathlabs, Thyrocare Technologies also performed well, rewarding IPO investors. While public offer from Devi Shetty’s Narayana Hrudayalaya made investors richer, HCG disappointed with a discounted listing. In the coming months, Metropolis Healthcare also plans to come up with its IPO and has already received regulatory clearances for the same. Metropolis is one of the 15 companies which have SEBI consent for launching IPO.