The initial public offering of Eris Lifesciences Ltd, which is backed by private equity firm ChrysCapital, was covered 3.3 times on Tuesday, the third and final day of the share sale.
The issue of 15.95 million shares, excluding the anchor investors’ portion, received bids for 52.5 million shares, stock exchange data showed.
The IPO size is pegged at Rs 1,741.16 crore at the upper end of the price band for a 21% stake dilution on a post-issue basis. The branded formulations firm is seeking a valuation of Rs 8,291.25 crore ($1.28 billion) through the IPO.
Retail investors continued to lead the bidding process. Their portion was subscribed 4.2 times the shares reserved for them.
The quota of shares reserved for institutional buyers was subscribed 4.7 times. Non-institutional investors, such as corporate houses and wealthy individuals, bid for only 45% the shares set aside for them.
Eris Lifesciences’ IPO began on a slow note on Friday, with the public issue covering 12% on the opening day, even as the drugmaker attracted a bunch of marquee anchor investors, including Abu Dhabi Investment Authority, a sovereign wealth fund owned by the United Arab Emirates.
The firm saw its public offering cross the three-fourths mark on the second day on Monday.
Ahead of the IPO, Ahmedabad-based Eris had raised about Rs 780 crore ($120 million) from anchor investors by selling 12.92 million shares at Rs 603 apiece, at the upper end of the Rs 600-603 price band.
Boston-based investment firm Eaton Vance Management, The Master Bank of Japan, FIL Investment (Mauritius), Morgan Stanley and Goldman Sachs, were among anchor investors, which also included a bunch of Indian mutual funds and insurance companies.
The IPO comprises a secondary offering by founders and other shareholders, including ChrysCapital. The PE firm’s investment arm Botticelli is selling its entire 16.25% stake through the IPO and will get around 75% of the proceeds.
The PE firm is set to reap a bountiful harvest from its six-year-old investment by taking home Rs 1,360 crore with 6.9 times return on its Rs 195-crore investment in September 2011. It translates into an internal rate of return (IRR) of 39% in rupee terms, as per VCCircle estimates. Private equity firms typically chase an IRR of 20-30% in India.
Eris was founded in 2007 by Amit Bakshi, a sales professional-turned-entrepreneur. Bakshi holds a 39.97% stake, and has opted to sell a 0.5% stake. Other selling shareholders include Rakesh Shah, Rajendra Patel, Kausal Shah and Inderjeet Negi.
Eris had filed its draft red herring prospectus on 8 February and received the approval for its IPO from the Securities and Exchange Board of India on 8 May. Axis Capital, Citibank and Credit Suisse are the financial advisers for the IPO.