Cadila Healthcare of the Zydus group is likely to revise the indicative price band for its public issue to Rs 250-350 from the previous range of Rs 300-350 owing to average price quoted by investors being lower than the expected level. The books closed yesterday.
Though the company received a large number of applications (around 40,000 yesterday alone), these were received at a lower price. The company at the start of its book-building process on February 9 had fixed an indicative price range of Rs 300-350 as advised by their merchant bankers.
The book runners to the issue are DSP Merrill Lynch, Kotak Mahindra and J M Morgan Stanley. ICICI Securities and Finance Company is the lead manager to the issue.
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Merchant banking sources associated with the deal confirmed the element of lower price being quoted and the receipt of more than 50,000 applications till yesterday.
The price band is likely to be lower from the earlier price going by the applications received till yesterday, a source said.
When contacted last late evening, Cadila Healthcare managing director Pankaj Patel said the pricing of the issue was as yet undecided.
"We are looking at the books, the response has been encouraging. As the bid closed yesterday, pricing will be decided in the next 48 hours. Books will be available today evening and pricing will be decided tomorrow.
"There has been no alteration in the indicative price. The response has been very good but I have yet to get the final numbers," he informed.
Being one of the first pharma issues to hit the stock market (after Glenmark Pharmaceuticals) the issue was still successful given the huge volume of applications, the source said. A final picture will evolve only on Thursday morning, he added.
The company is making an initial public offering (IPO) of 1,48,86,000 equity shares. The issue includes a book-built portion of 1,33,97,400 equity shares and fixed price portion of 14,88,600 equity shares. The company has a total funds requirement of about Rs 600 crore.
The funds will be deployed to complete a manufacturing facility, a research and development centre, retire debt,
and acquire brands or companies in both prescription and over the counter segments.