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Biocon Ltd, India's largest publicly held biotechnology company, has said that it is buying back the 7.69% stake held by GE Capital in Biocon's research arm Syngene for Rs 215.38 crore, valuing the research arm at around Rs 2,800 crore.
The buyback is being executed by Biocon Research Limited, a wholly owned subsidiary of Biocon. GE Capital had invested Rs 125 crore during end of October 2012 and is making a healthy exit. GE had during that time valued Syngene at a post-money valuation of Rs 1625 crore.
Syngene accounts around a fourth of Biocon's revenues of Rs 2,900 crore on an annualised basis and works with 16 of the top 20 pharmaceutical companies in the world including Bristol-Myers Squibb, Baxter and Abbott Nutition among others.
This move to buyback the stake held by GE Capital comes even as there is flux in the plans by Biocon to take this research arm public. Biocon CMD Kiran Mazumdar Shaw though has been maintaining that there are lot of elements which are being put in place and will be able to take this arm public at a later stage. The market though was anticipating a public offer during Fy15.
However, Biocon's spokesperson said that they continue to evaluate the situation for a listing but there is not specific timeline for it. According to information available, with the situation in India not conducive for clinical research services which is faced with many legal hurdles for aggresive growth of this sector, Biocon may have sought to buy more time for the public offer.
Syngene is among the top three clinical research organisations in India and it employs a good 2,000 researchers working extensively with various global companies including as part of key drug research. Biocon has so far made a capital commitment of around Rs 800 crore for this business.
Biocon shares on NSE gained marginally by 0.3% to close at Rs 501.80 per share on Tuesday
