Wednesday, January 16, 2008

Avesthagen To Tap Capital Market For Rs 1,200 Crore

BANGALORE: Avesthagen, a knowledge-based life sciences company, aims to raise between Rs 800 crore and Rs 1,200 crore through an initial public offering (IPO). The IPO is likely to hit the market by end-2008.

Founder and CMD of Avesthagen, Dr Villoo Morawala-Patell, is optimistic that investors will buy into her R&D-focused story. “We are well placed in this game. Avestha is here to build and it is in the company’s DNA. I will tell the R&D story to investors across India and also how innovation can make their life better,” said Ms Morawala-Patell in an interview with ET. The company also plans a European listing later.

Avesthagen, a systems-driven biology company, operates across a broad spectrum, including agriculture, therapeutics and nutrition. The funds raised would be used to scale up operations, global branding, manufacturing and setting up marketing offices abroad. At present, the valuation process is underway.

The founder-promoter’s stake will continue to remain at 31% post issue. Avesthagen’s shareholders include Danone Group, bioMerieux, Limagrain Group, Fidelity International, New York Life, ICICI Venture, Tata Industries, Godrej, Cipla and Bennett & Coleman.

Since 2001, the company has received three rounds of funding, apart from grants of $5 million. It received $30 million in Series C funding in 2007 from a clutch of investors. In the bionutrition business, Avesthagen is working on the ‘Avesta Inside’ model, where a clinically validated bio-active ingredient is included in food products. The company is also looking at forging alliances with FMCG majors for fortification of nutritional products.

The company is also eyeing a bigger play for Avesta Good Earth Foods in the health and wellness segment. It plans to take the brand to the UK and the US markets after suitable modifications. The company manufactures a range of cereals, crackers and snack bars that are marketed under the Avesta Good Earth Foods brand. The company plans to set up a facility in the SP Biotech Park in Hyderabad for the manufacture of bioactives and bionutrition products. The facility will comply with the recent changes in the US OTC & nutraceutical regulations.

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