Gland Pharma Ltd is set to become the first Chinese-controlled company to list on Indian stock exchanges.
The company, which is majority-owned by China’s Fosun Pharma, has received the Securities and Exchange Board of India’s (Sebi) approval to go ahead with its proposed ₹6,000 crore IPO, two people aware of the development said.
The company, which develops, manufactures and markets complex injectables, had filed the draft share sale document for its IPO with Sebi in July.
Shanghai-based Fosun acquired a 74% stake in the company in 2017.
The IPO comes at a time when bilateral relations between the two neighbours are at rock bottom following deadly border clashes in June. As a fallout, India has banned several Chinese apps and restricted the flow of Chinese capital and goods into India.
All investments from China and Hong Kong are required to mandatorily undergo government scrutiny and approval. This has severely slowed down the flow of Chinese capital into Indian firms, especially tech startups.
To be sure, Gland Pharma’s IPO plans appear unlikely to be affected by the tension.
In fact, given the tailwinds that Indian pharma has been witnessing since covid, the Gland Pharma deal too is seeing a strong appetite from investors, said one of the people cited above, speaking on the condition of anonymity.
“There is very strong demand for the deal. It will be launched early next month. The company is likely to be listed on the exchange before Diwali,” he said.
Gland Pharma plans to raise ₹1,250 crore through the IPO.
Existing promoters plan to sell around 34 million shares, which could be worth around ₹4,750 crore. Fosun Pharma will sell a 12.5% stake.
The company will use the proceeds for capex and working capital requirements.
Gland Pharma has an established portfolio of injectable products across therapeutic areas and delivery systems.
For the fiscal to March, the company reported a revenue of ₹2,772.4 crore, as against ₹2,129.7 crore in the previous year. In 2019-20, it reported a profit of ₹772.8 crore against a profit of ₹451.8 crore in the previous fiscal.
Kotak Mahindra Capital Co. Ltd, Citigroup Global Markets India Pvt. Ltd, Haitong Securities India Pvt. Ltd and Nomura Financial Advisory and Securities (India) Pvt. Ltd are advising the company on the IPO.
An email sent to Gland Pharma did not elicit a response.