Review By on July 17, 2015
Subsidiary of Biocon Ltd, Syngene International Ltd (SIL) is coming out with its maiden IPO via book building process offer for sale from existing stakeholders. It is offering 22000000 equity share of Rs. 10 each in a price band of Rs. 240-250 and thus mulls mobilizing Rs. 528-550 crore on at the basis of lower and upper price band. Out of the offer, 2000000 equity shares are kept reserved for preferential allotment to Biocon shareholders. Issue opens for subscription on 27.07.15 and will close on 29.07.15. Minimum application is to be made for 60 shares and in multiples thereon, thereafter. Funs mobilized will be utilized for the capex planned by Biocon Ltd. for developing its biosimilars and enhancing the manufacturing capacities. SIL is a niche player from India in CRAM segment and is confident of having benefit from the growth in global markets.
SIL is engaged in contract based discovery, development and manufacturing at its ultra modern world class research and development facility. 95% of its revenue comes from global clients and the rest from domestic clients. As claimed in RHP by promoters and merchant bankers, there are no listed peers to compare with. The company has made two bonus issues in the ratio of 7.3 for every 1 share held (on 28.02.12) and 6.1 shares for every 1 share held (on 27.03.15). It issued equity at par during May 1994- March 2000 and thereafter in a price range between Rs. 80 to Rs. 1353.80 (on FV of Rs. 10 basis) during June 2000-March 2015. In fact shares issued during first quarter of calendar year 2015 has an effective cost of Rs. 190 per share on post bonus basis. Thus asking price is at 25% premium to last issue price and at a P/E of 27 plus based on concluded fiscal earnings per share of Rs. 8.89. These beings offer for sale, equity remains same post IPO that constitutes 11% dilution of post offer equity that remains at Rs. 200 crore.
On performance front, for the last three fiscals, the company has posted growth in revenue and EBITDA margins at a CAGR of 25% and 32% respectively with an average EPS of Rs. 7.74 (on diluted basis). Its turnover / net profit are Rs. Rs. 554.20 crore/Rs. 102.10 crore (FY 2013), Rs. 707.70 crore/Rs. 134.80 crore (FY 2014) and Rs. 871.60 crore/Rs. 175.00 crore (FY 2015).
BRLM to this offer for sale are Axis Capital Ltd, Credit Suisse Securities (India) Pvt Ltd and Jefferies India Pvt Ltd. Karvy Computershare Pvt Ltd is the registrar to the issue. Post allotment, shares will be listed on BSE and NSE.
Syngene Intl Ltd - Modest investment recommended
DISCLAIMER: No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here. Any reader taking decisions based on any information published here does so entirely at own risk. Author has no plans to invest in this offer.
Review By on July 17, 2015
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst ā Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Syngene International Ltd. offers an early investment opportunity in Syngene International Ltd.. A stock market investor can buy Syngene International IPO shares by applying in IPO before Syngene International Ltd. shares get listed at the stock exchanges. An investor could invest in Syngene International IPO for short term listing gain or a long term.
Read the Syngene International IPO recommendations by the leading analyst and leading stock brokers.
Syngene International IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Syngene International IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Syngene International IPO?"
Our recommendation for Syngene International IPO is to subscribe.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to subscribe to the Syngene International IPO.
The Syngene International IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Syngene International IPO allotment status to check.
