Eris Lifesciences gets SEBI nod for Rs 2000 crore IPO

Securities and Exchange Board of India’s (SEBI) has granted approval for an initial public offering IPO to Ahmedabad-based pharmaceutical company Eris Lifesciences Ltd on 28th April.

This is 12th company to receive regulatory nod this calendar year and enables it to join select group of pharmaceutical companies which have gone public over the past couple of years which include Syngene International Ltd, Biocon Ltd, Alkem Laboratories Ltd and Laurus Labs Ltd whereas backed Mankind Pharma Ltd was planning an IPO in near future.

Eris Lifesciences was founded in 2007 by Mr.Amit Bakshi an enterpreuner and it had 2,287 employees across India as on 30 September 2016 with a network of 1,310 marketing representatives.

Eris develops, manufactures and sells branded pharmaceutical products in therapeutic areas which include cardiovascular, anti-diabetics, vitamins, gastroenterology and anti-infectives.

Eris Lifesciences reported a consolidated net profit of Rs 129 crore on operating revenue of Rs 370 crore for the six months ended 30 September 2016, according to the prospectus.

For 2015-16, revenue from operations stood at Rs 597 crore compared with Rs 545 crore the previous year. Consolidated net profit for 2015-16 was Rs 133 crore compared with 89 crore the year before.

The chronic category contributed 65.4% to Eris’ revenue for the six months ended September 2016, compared with 64.2% in 2015-16, as per the DRHP.

The IPO of Eris Lifesciences Ltd will comprise 28.87 million shares through an offer for sale by ChrysCapital and promoters. This represents 21% stake dilution on a post-offer basis. Botticelli is selling its entire 16.25% stake, or 22.34 million shares, through the IPO, reports VCCircle

Its average cost for acquiring this stake from 2011 through 2016 is Rs 87.27 a share, as per information made available in the DRHP.

The issue size is expected to be around Rs 2,000 crores which will value Eris at Rs 9,500-10,000 crore.ChrysCap will exit the firm and would get around three-fourths of the issue proceeds.

The bankers to the issueare Axis Capital, Citibank and Credit Suisse whereas law firm Shardul Amarchand Mangaldas & Co is representing Eris and selling shareholders, including ChrysCap. Khaitan & Co and Sidley Austin LLP being Indian and international legal counsels, respectively, to the merchant bankers managing the IPO.