The company has appointed investment bank o3 Capital to manage the stake sale, the people cited above said, requesting anonymity. Both did not disclose the size of stake that Shilpa plans to sell. Shilpa Medicare and o3 Capital did not respond to requests for comment.
The planned stake sale in the API business, which is significantly focused on oncology, is likely to begin with the sale of a minority stake, the people cited above said. Shilpa Medicare had a market capitalization of ₹2,720 crore ( $332 million) at close of trading on Monday. The company generates bulk of its revenue from the API business, said the people cited above.
Shilpa Medicare reported revenue from operations of ₹1145.52 crore in FY22 and a net profit of ₹60.6 crore.
The company had earlier planned to raise ₹1,000 crore through a public listing of the API unit, Mint reported in April. It had mandated Axis Bank and Jefferies for the IPO.
Responding to a query in an analysts’ call on 30 August on the timeline for listing the API unit, chief financial officer Alpesh Dalal said, “The company was keen to allow some time for the operations to settle down as a separate entity, and also generate its own independent revenue, and its own independent performance to be visible and available." He, however, said that the company may consider monetizing the API business “at the right point".
“Our Board has given us a go ahead to explore an IPO if it is the most appropriate option, but we are still evaluating that and, you know, at a right point in time we will come out with our further updates and announcements on the same if and when we are going ahead with any of monetization of our APIs," Dalal said.
In the same call, managing director Vishnukant Bhutada said the company was working on various steps to ease pressure on the API platform, which was going through a period of increased costs and falling selling prices.
These include “yield improvement through the process changes, backward integration to the intermediates including reducing dependency on China, increasing the scale of operation by increasing the batch sizes and expanding the capabilities of the various manufacturing blocks," he added.
