India's Biocon easily reached the top end of its range for an initial public offering of shares in CRO Syngene, a brokerage source said, adding that recent reports of troubles at other Indian companies in the sector had no impact on demand.
Biocon's stake will drop to about 74% from nearly 84% and cash raised of around $95 million will fund plans for growth at Biocon, including the development of biosimilar candidates, Chair and Managing Director Kiran Mazumdar-Shaw told Reuters before the IPO.
In January, Biocon concluded sale of a 10% stake in Syngene to IVF Trustee.
Official data from the National Stock Exchange showed that, as of the close on Wednesday, the IPO, which opened from July 27 to 29, was oversubscribed with bids 32 times the 22 million shares on offer and led by strong retail and institutional investor interest. Biocon had set the IPO range at INR240 to INR250 ($3.91) a share.
The final figures for the IPO price and other details should be released after the markets close on Thursday, the brokerage source in India told FiercePharmaAsia, while noting recent regulatory sanctions on local CROs GVK BioSciences and Quest Life Sciences for shoddy testing quality did not weigh on the offer because of the high regard for management at Biocon.
"Kiran Mazumdar-Shaw is well regarded in India in the market and by the government and the same for foreign investors or companies looking at India," the brokerage source, who declined to be named, said.
Last month, India's Foreign Investment Promotion Board sharply hiked the foreign investment limit allowed to 44% from 10% in the IPO.
Syngene works with clients such as Merck & Co. ($MRK) and Bristol-Myers Squibb ($BMY), as well as in-house work for Biocon.
While not mentioning interest from abroad directly, Mazumdar-Shaw told Moneycontrol.com that broad support was important.
"I am pleased that this is the second listing we have done [after Biocon] and it has been very successful," Mazumdar-Shaw told Moneycontrol.com.
"We have got a very good anchor book of very quality investors. We have also got huge demand from high net worth individuals (HNIs) and other qualified institutional placement (QIP)."
Earlier this week, an industry body chief said the fallout from a European Union-wide ban on more than 700 drugs that were bioequivalency-tested by India's GVK BioSciences could cost India at least $1 billion in exports by the end of the fiscal year in March 2016, according to the Economic Times.
The move came after a separate stinging rebuke and sanction by the World Health Organization to CRO Quest Life Sciences this month over falsified ECGs in an HIV drug trial.
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