Carlyle-backed pharma company Claris Lifesciences made a poor debut, listing 1.6% below issue price which itself was cut sharply from the original price band after receiving lukewarm response from investors. The scrip never managed to even touch its issue price in intra-day trading and was quoting at Rs 215 at mid-day on day 1, down 5.7% to its issue price.
However, even with a modest debut, Carlyle is sitting on unrealised gains of 70% on its four-and-half-year-old investment.
Carlye, through First Carlyle Ventures III, had invested $20 million (Rs 90 crore) in Claris Lifesciences in March 2006, through preferential shares that represented 13.89% stake pre IPO. Its average cost of purchase works out to be around Rs 127 a piece. Carlyle’s investment was to fund expansion in capacity, establishing new facilities, R&D and product development initiatives.
The fresh public issue has diluted Carlyle’s stake to around 11.1%.
The Ahmedabad-based pharma company raised Rs 300 crore through the public issue. While originally it had fixed the price band at Rs 278-293 per share, it had to cut it down to Rs 228-235 per share and also extend the closing date for the issue after investors did not appear too bullish to subscribe to the IPO.
It maintained the size of the issue leading to marginally higher equity dilution than originally envisaged. JM Financial Consultants, Edelweiss, ICICI Securities and Enam Securities were the lead managers to the issue.
Claris plans to use the IPO funds to set up some new manufacturing lines besides repayment of Rs 50-crore term loan. The 10-year-old firm’s product basket includes the high-end critical care segments such as clinical nutrition, anesthesia, blood products, plasma expanders, transplant, dialysis, anti-infectives, and cardiology.
For the year ended December’09, Claris had total revenue of Rs 760 crore with net profit of Rs 125 crore. Its overseas business has contributed about 54% or Rs 406 crore of the company’s revenue, according to DRHP data. It has presence in 76 countries.
US-based private equity major TA Associates is believed to be in initial talks to acquire a minority stake in Claris Lifesciences and as reported by VCCircle earlier, TA is likely to acquire a part of the stake held by Carlyle.