Veeda Clinical Research Ltd IPO - 7 things to know

Veeda Clinical Research Ltd, a company focussed on bio availability and bio equivalence studies, had filed its draft red herring prospectus (DRHP) in September 2021 and SEBI has already given its observations and approval for the IPO in December 2021.

Normally, the IPOs are approved by SEBI within a period of 2 to 3 months unless there are other queries or clarifications that the regulator has.

The IPO of Veeda Clinical Research Ltd will be a combination of a fresh issue and an offer for sale but the next step will be for the company to finalize on its issue date and issue price so that it can start the IPO process.
 

7 interesting facts to know about the Veeda Clinical Research Ltd IPO

1) Veeda Clinical Research Ltd has filed for an IPO with SEBI and also got the SEBI approval to go ahead with the IPO. The Veeda Clinical Research IPO comprises of a fresh issue of Rs.331.60 crore and an offer for sale of Rs.500 crore taking the total issue size to Rs.831.60 crore.

However, since the price band for the granular details like the number of shares offered and final value are not yet known. The company has just given a rupee break-up of the size of the fresh issue and the offer for sale.

2) Let us talk about the offer for sale (OFS) portion of the IPO first. A total of Rs.500 crore worth of shares will be sold by the early investors as part of the offer for sale, while the promoters are not exactly diluting their stake in the company.

The OFS component will not result in any fresh fund infusion or dilution of the capital or the EPS. However, the selling of stake by the promoter will increase the free float of the company and facilitate listing of the stock.

The main sellers in the Rs.500 crore OFS include CX Alternative Investments Fund Rs.8.08 crore, Arabelle Financial Services Rs.90.19 crore, Bondway Investments Rs.259.77 crore, Stevey International Corporation Rs.0.04 crore and Basil Private Limited Rs.141.93 crore.
 

3) The fresh issue portion of Rs.331.60 crore will issue fresh shares in the quantum based on the total price of the offer as decided. Let us not look at how the funds raised via fresh issue will be utilized by Veeda Clinical Research.

It will use the funs predominantly to repay or to prepay debt, to undertake capital expenditure for business footprint expansion, invest in subsidiary Bioneeds and also for working capital funding and also for general corporate purposes.

4) Veeda Clinical Research, based out of Ahmedabad in Gujarat, has the backing of CX Partners. Just 8 months back, the company had raised $16 million from Sabre partners.

The family offices the promoters of J B Chemicals, Havells India and Jubilant Group are also invested in the group as is Nikhil Vora of Sixth Sense Ventures.

Veeda has recently acquired 50.1% in Bengaluru-based Bioneeds India to help its bio availability and bio equivalence studies, which is the core business of Veeda Clinical Research.

5) Established in the year 2004, Veeda Clinical Research has expanded from just one facility to four facilities. Frost & Sullivan has ranked Veeda as one of the largest independent full-service clinical research organisations (CRO) in India.

The focus of the company is in a very narrow segment of Bio Availability/Bio Equivalence (BA/BE) studies. This is the first stage of developing generic drugs when the original formulations go out of license period.

Veeda provides the total support ecosystem from drug development to drug-launch across global markets like North America, Europe and Asia.

6) In FY21 Veeda has successfully completed studies for 157 clients; including marquee names like Reddy Labs, Mankind Pharma, Granules India etc. Veeda has already conducted over 3,500 trials and developed over 1,000 bio-analytical methods across generics.

Veeda Clinical Research reported revenue from operations of Rs.195.81 crore for the financial year ended March 2021. It reported healthy net profits of Rs.62.97 crore, implying net profit margins of 32.16%.

7) The IPO of Veeda Clinical Research Ltd will be lead managed by SBI Capital Markets, ICICI Securities, JM Financial and Systematic Corporate Services. They will act as the sole book running lead managers or BRLMs to the issue. Link In Time India Private Limited will be the registrar to the IPO.

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