Claris Lifesciences IPO Nov 24 – Nov 26, 2010

Stock Market | admin | November 23, 2010 at 5:49 pm

Claris IPO The initial public opening (IPO) of Claris Lifesciences, a sterile injectables pharmaceutical company, is set to enter capital market for subscription on November 24 and close on November 26, 2010.

The company aims to raise Rs 300 crore through IPO.

As per the draft prospectus, Claris is one of the largest Indian sterile injectables pharmaceutical companies with a presence in 76 countries worldwide. Products offering comprises 113 products across multiple markets and therapeutic areas. All of its products are off-patent products, a significant majority of which are capable of being directly injected into the body and are predominantly used in the treatment of critical illnesses.

Proceeds of the issue will be used for setting up of a new plant comprising a small volume parenterals line – a PVC bag line, a non-PVC bag line and a fat emulsion line. It will be used for setting up of a new manufacturing line for propofol and other fat emulsion products at existing plant in Clarion IV. The funds will also be used construction of a facility for research and development at Clarion manufacturing facilities; and prepayment of an identified term loan.

Enam Securities Private Limited, Edelweiss Capital Limited, JM Financial Consultants Private Limited and ICICI Securities Limited are the book running lead managers to the issue.

Claris Lifesciences Price Band

Claris Lifesciences, one of the largest sterile injectables pharmaceutical companies in India, today said that it has set a price of Rs278-293 a share for its initial public offer (IPO).

The Ahmedabad-based drugmaker, which is seeking to raise funds aggregating to Rs300 crore, said its IPO will open on 24 November and close on 26 November.

The company has appointed Enam Securities, Edelweiss Capital, JM Financial Consultants and ICICI Securities as the book running lead managers to the issue.

Claris Lifesciences will use the IPO proceeds to prepay a term loan, expand its manufacturing capacity and set up a research and development facility.

Claris Lifesciences is one of the largest sterile injectables pharmaceutical companies in India with a market presence in 76 countries worldwide.

With five manufacturing facilities spread over a 78-acre campus located in Ahmedabad, the company primarily manufactures and markets products across multiple markets, and therapeutic segments. A significant majority of these products are generic drugs that are capable of being directly injected into the human body and are predominantly used in the treatment of critical illnesses.

Its products range across various therapeutic segments, including anaesthesia, critical care, anti-infectives, renal care, infusion therapy, enteral & parenteral nutrition and oncology.

Claris Lifesciences customer base primarily includes government and private hospitals, aid agencies, and nursing homes.

Claris Lifesciences Ltd, a sterile injectable pharmaceutical company based in Ahmedabad, is expected to raise approximately Rs 300 crore in its initial public offering (IPO) that opens on Wednesday. The firm will utilise the money to set up a new manufacturing unit and a research and development division. The IPO proceeds will be used for the company’s expansion and product development plans and for the prepayment of a term loan.

The price band has been fixed between Rs 278 and 293 per equity share. The IPO is expected to close on November 26.

Around 44 per cent of the proceeds will be used for the setting up of a new factory to IPO produce mainly PVC and non-PVC bags and a fat emulsion line. Another 15 per cent of the amount will be used to prepay a term loan, 13 per cent will be used to set up a research and development facility, 9 per cent will be used in setting up a new manufacturing line for Propofol (Claris’ flagship product) while the rest will be utilised for general corporate purposes, the company said.

Private equity investor Carlyle India Advisors holds a 13.9 per cent stake in the company. Shankar Narayanan, managing director of Carlyle, said, “We will continue to hold this stake in the foreseeable future as we believe in the strength and prospects of this company.”

Recently, the company was involved in a litigation suit with the US Food and Drug Administration (USFDA), which sent a warning letter on November 1, 2010. Due to the USFDA stand, goods and products worth Rs 7.4 crore has been recalled from the US.

“These goods represent a mere 3.6 per cent of our total revenue and our deal with Pfizer for selling Propofol” in the US stands, said Arjun Handa, chief executive and managing director, Claris Lifesciences.

The company caters to emerging markets and has its presence in 76 countries worldwide. Their product range varies across therapeutic segments including anaesthesia, critical care, renal care, infusion therapy, anti-infectives, parental nutrition and oncology.

“Currently, the company boasts of a product basket of 128 products with 139 additional products in the pipeline, under registration,” said Handa. The company’s profit after tax (PAT) stood at Rs 325 crore while sales were at Rs 745 crore for 2009. Handa said that PAT grew at 67 per cent for the last five years and the revenue grew at 27 per cent. The bulk of the company’s revenue comes from exports, which accounts for 55 per cent of sales.