Biocon is planning to list its newly-created subsidiary Biocon Biologics over the next couple of years. Biocon chairperson and managing director Kiran Mazumdar-Shaw revealed this while talking to CNBC-TV18. Biocon Biologics was carved out as a subsidiary focused on research and development, manufacturing and commercialization of biosimilars business. Biocon Biologics IPO is likely to be preceded by another round of private equity injection.
We might raise little more private equity prior to IPO. This basically gives an idea of where we believe we can unlock the value in terms of Biocon Biologics in the next few years
Kiran Mazumdar-Shaw
Earlier this year in January, private equity fund True North announced to acquire 2.44% stake in Biocon Biologics for INR536.25 crore, valuing the business at nearly INR21,450 crore. True North (then known as India Value Fund) was also an investor in Syngene International – Biocon’s contract research subsidiary.
Biocon Biologics IPO: Ambitious target for FY2022
Biocon Biologics has set an ambitious target to achieve revenues of USD1 billion (INR7,000 crore) by FY2022. During the year ended 31 March 2019, the company recorded revenue of INR1,528 crore which has increased to INR1,006 crore for the six months ended 30 September 2020.
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As of now, it has a product pipeline of 28 molecules, which includes development work with Mylan and Sandoz.
Another line of business important for the company is its affordable insulin access programme. The company plans to be a disrupter by offering recombinant human insulin at nearly one-third of the current market prices. Biocon Biologics is gearing up to launch it in the US and is also in discussions with governments of many low-to-middle income countries.
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Biocon Biologics IPO: From Syngene playbook
Biocon had listed its contract research arm Syngene in a similar fashion by raising private equity funds, followed by an IPO in August 2015. The IPO offered at bonus adjusted rate of INR125 per share and currently trades at INR307 per share. The fast growing company was identified as a potential winner in our analysis.
Without a doubt, investors will be similarly interested in Biocon Biologics IPO, although it needs to be seen how much comfort valuations offer. In the latest round, the company was valued at nearly 10 times of its expected revenues of INR2,000 in FY2020.
