Volatile market takes toll on Pharmaceuticals and healthcare IPO plans

Similarly, Chennai-based Vasan Eyecare has pushed back its plans to raise about Rs 800 crore by 2013 to 2014. Its chairman A M Arun, however, said the rescheduling has nothing to do with market conditions but has more to do with the company’s revised strategy to become a national player by “getting the scale and mileage” before raising money from market. The company got $100 million funding from Singapore sovereign fund GIC last month, which will be used to scale up its business.

Jawed Habib plans to become the country’s first first hair salon and beauty chain to be listed has also been dashed after it deferred its plan to raise Rs 60 crore from the market.

According to a SMC Global Securities report, 25 IPOs which collectively planned to raise Rs 31,000 crore were called off in 2011 due to the volatile stock markets. This year, so far, 13 IPOs have been dropped. In April last year, the Sensex nearly touched 20,000 but fell to a little over 15,000 in December and closed at 15,948 on Tuesday.

India’s largest diagnostic firm SRL Laboratories’ Rs 300 crore IPO may also not make it this year. The company is yet to submit its revised documents to SEBI, a year after it had to withdraw its offer documents due to change in ownership of the firm. In May last year, SEBI had asked the company to reapply within 4-6 weeks.

A person familiar with the SRL’s plans said that while the IPO is imminent, the timing will be determined by market conditions. Secondly, there was no need to hurry as the firm’s primary objective of raising the fund — to wipe of debt of Rs 250-300 crore– will be taken care of by fund infusion from two investors.

Surjit Pal, pharmaceuticals analyst at Elara Capital said that some of these firms are not well known firms or big firms, and therefore, would not have got the premium they expect in such market conditions.

Noida-based Goodwill Hospital’s Rs 62 crore initial public offer, was withdrawn after the proposed issue failed to muster even 1% of its shares on sale, becoming the first casualty of the volatile market this year.

Ahmedabad-based Marck Biosciences has dropped its Rs 85 crore IPO. “The IPO could have been pulled off, but pricing would be at a discount as the sentiment in primary market is weak,” Marck Biosciences MD Bhavesh Patel said. The firm got market regulator SEBI’s approval for public listing in February last year.