InvestorQ : Can you throw some light on the Gland Pharma IPO and what is the government stand on allowing a Chinese company to come out with an IPO in India?
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Can you throw some light on the Gland Pharma IPO and what is the government stand on allowing a Chinese company to come out with an IPO in India?

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Deepa Salunkhe answered.
5 months ago
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Here are some highlights of the Gland Pharma IPO, which you must be familiar with.

· Gland Pharma is majority owned by Fosun Pharma of China and now despite the strained relations between the two nations, SEBI has given Gland Pharma the permission to launch its Rs.6000 crore IPO.

· Gland Pharma is based out of Hyderabad and specializes in the manufacture of injectables and other drugs. Interestingly, it would mark the first major IPO by an Indian company that has a Chinese parent as it has never happened before.

· Clearly, Gland Pharma sees value in the market at this point of time due to attractive valuations in the pharma sector. This would be the right time for any pharma company to get solid valuations in the market.

· SEBI’s final observations on the submission only came this week and updated documents will be filed soon. Post that, the red herring prospectus or the RHP will be filed with Registrar of Companies or ROC. That is when the issue process starts.

· While details are awaited, the issue would be a combination of new issue and offer for sale. In the OFS, both Fosun group and the founders of Gland Pharma are expected to dilute shares as part of the issue. IPO proceeds will largely go for capex needs. The fresh issue will be Rs.1250 crore and the offer for sale will be Rs.4750 crore.

· Fosun acquired 74% in Gland Pharma for $1.09 billion from Kohlberg Kravis Roberts or KKR in October 2017. The balance stake is with the promoters. The company is a pure generics play in the area of injectables. Most of the revenues come from the US.

· Gland Pharma has 7 manufacturing facilities including 4 at Hyderabad and 3 at Vizag. Its product portfolio includes anti-diabetics, anti-infectives, anti-malarial, anti-neoplastics, cardiac, gastro-intestinal and hormonal formulations.


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