INDIA –
The volatile market condition has
affected the fund raising plans of pharmaceutical and healthcare companies with
several firms either withdrawing or deferring their initial public offers
(IPO).
Drug
maker Intas Pharmaceuticals became the latest to join the list after deferring
its IPO in April. Last July, the company got market regulator SEBI’s approval
to raise Rs 425 crore through the issue of fresh shares. In addition,
ChrysCapital was to part-exit its six-year-old investment by selling about half
its stake. Instead, the PE firm has invested about Rs 300 crore for an
additional undisclosed stake.
Similarly,
Chennai-based Vasan Eyecare has pushed back its plans to raise about Rs 800
crore by 2013 to 2014. Its chairman A M Arun, however, said the rescheduling
has nothing to do with market conditions but has more to do with the company’s
revised strategy to become a national player by “getting the scale and mileage”
before raising money from market. The company got $100 million funding from
Singapore sovereign fund GIC last month, which will be used to scale up its
business.
Jawed
Habib plans to become the country’s first first hair salon and beauty chain to
be listed has also been dashed after it deferred its plan to raise Rs 60 crore
from the market.
According
to a SMC Global Securities report, 25 IPOs which collectively planned to raise
Rs 31,000 crore were called off in 2011 due to the volatile stock markets. This
year, so far, 13 IPOs have been dropped. In April last year, the Sensex nearly
touched 20,000 but fell to a little over 15,000 in December and closed at
15,948 on Tuesday.
India’s
largest diagnostic firm SRL Laboratories’ Rs 300 crore IPO may also not make it
this year. The company is yet to submit its revised documents to SEBI, a year
after it had to withdraw its offer documents due to change in ownership of the
firm. In May last year, SEBI had asked the company to reapply within 4-6 weeks.
A
person familiar with the SRL’s plans said that while the IPO is imminent, the
timing will be determined by market conditions. Secondly, there was no need to
hurry as the firm’s primary objective of raising the fund — to wipe of debt of
Rs 250-300 crore– will be taken care of by fund infusion from two investors.
Surjit
Pal, pharmaceuticals analyst at Elara Capital said that some of these firms are
not well known firms or big firms, and therefore, would not have got the
premium they expect in such market conditions.
Noida-based
Goodwill Hospital’s Rs 62 crore initial public offer, was withdrawn after the
proposed issue failed to muster even 1% of its shares on sale, becoming the
first casualty of the volatile market this year.
Ahmedabad-based
Marck Biosciences has dropped its Rs 85 crore IPO. “The IPO could have been
pulled off, but pricing would be at a discount as the sentiment in primary
market is weak,” Marck Biosciences MD Bhavesh Patel said. The firm got market
regulator SEBI’s approval for public listing in February last year.
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