Visakhapatnam-based drug ingredients manufacturer Laurus Labs has filed its draft red herring prospectus (DRHP) with capital market regulator SEBI. In the draft prospectus, the company has said it plans to raise INR300 crore (INR3 billion) by issuing new shares while also offering existing shareholders an exit route through the Laurus Labs IPO. The upcoming IPO will be managed by Kotak Mahindra Capital, Citigroup Global Markets, Jefferies and SBI Capital Markets.
The Visakhapatnam-based drug firm plans to use the IPO proceeds to prepay term loans and for general corporate purposes. As of 30 June 2016, Laurus Labs had INR11.1 billion in outstanding loans.
Laurus Labs IPO, once cleared by SEBI, will involve sale of 24,844,240 shares by existing investors including private equity firm Warburg Pincus. According to the prospectus, the offer for sale (OFS) will include 9,040,240 shares by Aptuit, 9,000,000 shares by Bluewater, and 6,760,000 shares by FIL Capital Management. Aptuit belongs to Welsh Carson Anderson & Stowe while Bluewater is the investment vehicle of Warburg Pincus group. FIL Capital Management is part of Eight Roads Ventures, earlier known as Fidelity Growth Partners.
Incorporated in 2005 by industry veteran Satyanarayana Chava, Laurus Labs has caught the fancy of private equity investors in recent years. In its prospectus, the company said its standalone revenues grew at a CAGR of 41% from INR4.5 billion in FY2012 to INR17.8 billion in FY2016. In the same timeframe, its restated profit compounded at the rate of 60.6% from INR215.77 million to INR1.4 billion. As a result of the tremendous growth in top and bottom-line, Laurus Labs IPO will be closely watched by investors.
Laurus Labs is the latest healthcare firm to tap the great IPO rush currently underway in India. In the last 12 months, Dr Lal Path Labs, Narayana Hrudayalaya, Alkem Laboratories, Thyrocare Technologies, Healthcare Global (HCG) brought their IPOs while VLCC Healthcare and New Delhi Center for Sight have received SEBI’s approvals to bring their public offerings.