Biocon, one of India’s largest biopharmaceutical companies, is re-evaluating the future of its biosimilars business as it weighs a potential USD 4.5 billion (~INR 4,000 crore) merger of Biocon Biologics (BBL) with the parent entity. The move comes at a pivotal moment for the Bengaluru-based company, which is attempting to balance global expansion ambitions with the realities of acquisition debt and an uneven equity market.
What began as a carefully-planned path toward an Biocon Biologics IPO has now broadened into a three-pronged strategic assessment:
• Biocon Biologics merger with Biocon
• Biocon Biologics IPO
• A potential share-swap or cash-plus-swap arrangement with minority investors
Biocon has appointed Morgan Stanley to evaluate which route offers the highest long-term shareholder value.
A Strategic Pivot Driven by Debt Overhang
Biocon Biologics’ acquisition of Viatris’ global biosimilars business for USD 3.3 billion in 2022 marked a transformative moment for the company—expanding its global presence and product pipeline but also adding approximately USD 1.2 billion in acquisition-related debt.
That debt has proven to be a decisive factor in why the Biocon Biologics IPO plans stalled.
“The valuation we were trying to get for the IPO was under pressure because of the acquisition debt,” — Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Group
With IPO valuations dampened and global markets facing persistent volatility, Biocon’s board began examining the merger route—a move that could streamline operations, improve transparency, and potentially unlock value by consolidating biosimilars directly under the listed entity.
What the Numbers Say: Strength and Strain
Biocon Biologics enters this strategic review with an improving operational and financial profile.
FY25 Performance Highlights
- Consolidated revenue: INR 9,017.4 crore (up 2% YoY)
- Underlying revenue growth: 15% (excluding branded formulations and one-time income)
- EBITDA: INR 3,027.4 crore (up 38% YoY)
- EBITDA margin: Improved sharply from 25% to 34%
- Net profit: INR 889.6 crore (308% YoY surge), powered by operational leverage and Viatris integration benefits
Biocon operates in 100+ countries, reaches 5.5 million patients annually, and claims one of the most comprehensive global biosimilar portfolios—20 products across oncology, immunology, and diabetes.
Investor Base and Ownership Structure
As of 31 March 2025:
- Biocon: 90.2%
- Serum Institute of Life Sciences: 5.97%
- Other investors: True North, Tata Capital
- Past investors: Goldman Sachs, Abu Dhabi’s ADQ
Serum Institute notably doubled its investment to USD 300 million in 2023, signalling global investor confidence in the Biocon Biologics platform.
Financial Manoeuvring: Raising Capital & Refinancing Debt
To tighten its control over Biocon Biologics and facilitate investor exits, Biocon raised INR 4,500 crore in June 2025 via a qualified institutional placement (QIP)—its first such fundraise since 2004. BBL also refinanced USD 1.1 billion (~INR 9,760 crore) of long-term debt in 2024 through USD bonds and syndicated loans, reinforcing its credit strength and lowering interest costs.
Yet, despite these efforts, total acquisition-related debt continues to weigh on valuation discussions—a central reason an IPO remains challenging in the near term.
Market Response and Investor Sentiment
Biocon merger speculation has triggered meaningful reactions across the market:
Biocon stock climbed 2.6% to INR 416.85, a 52-week high, after media reports highlighted the internal merger evaluation and Morgan Stanley’s appointment. SBI Mutual Fund increased its stake from 4.97% to 5.00% by purchasing 3,70,150 shares, reflecting institutional conviction at a moment of strategic transition.
What Biocon Merger Could Achieve
- Streamlining the Corporate Structure: Merging Biocon Biologics with Biocon would create a single, fully integrated biosimilars player—simplifying reporting, reducing duplication, and presenting a clearer narrative to public-market investors.
- Unlocking Shareholder Value: With Biocon trading at a sizable discount relative to global biosimilar peers, consolidation could give investors full access to BBL’s high-growth economics.
- Strengthening the Balance Sheet: A merger could simplify debt management and potentially improve leverage metrics at the consolidated level.
- Avoiding a Weak IPO Window: With market volatility elevated, the merger offers a potentially superior alternative to a pressured IPO.
Merger vs. Biocon Biologics IPO—Which Unlocks More Value?
Biocon’s management maintains that all options remain open until Morgan Stanley completes its assessment.
Notably, Biocon’s Co-Managing Director clarified that the board has not yet approved any merger, emphasizing that the process remains exploratory.
Given global demand for biosimilars and BBL’s expanding footprint, the choice between a merger and an Biocon Biologics IPO hinges on two key considerations:
- Short-term valuation uplift vs. long-term independence premium
- Ability to manage and reduce acquisition debt efficiently
For now, both investors and analysts await clarity on whether the merger route offers the faster, cleaner, and more profitable path—or whether a revived IPO market could ultimately deliver better returns.
Final Words
Biocon’s exploration of a USD 4.5 billion (~INR 40,000 crore) internal merger marks one of the most important strategic turning points in its corporate history. The decision will determine not only the financial trajectory of Biocon Biologics but also Biocon Limited’s positioning in a global biosimilars market expected to exceed USD 100 billion this decade.
Whether the company chooses a merger, IPO, or hybrid structure, the outcome will reshape the future of India’s most globally ambitious biotech enterprise.
For investors, the months ahead promise significant developments—and potentially, a re-rating of one of India’s most influential pharmaceutical groups.
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