Olympus- and Triodos-backed lender, Glenmark arm get IPO nod

 Olympus- and Triodos-backed lender, Glenmark arm get IPO nod

Utkarsh Small Finance Bank, which secured funding from Dutch asset manager Triodos Investment Management and Swiss impact investor responsAbility Investments AG recently, has received regulatory approval to go public.

Varanasi-based Utkarsh SFB has received approval of the capital markets regulator Securities and Exchange Board of India (SEBI) to go ahead with its initial public offering.

The lender had filed a draft prospectus with SEBI targeting Rs 1,350 crore ($184.4 million) in fresh and secondary capital in March. Over and above the planned capital raise from the IPO, the bank had mobilized Rs 241 crore ($33 million) by issuing fresh shares to new investors including Triodos and responsAbility.

The development finance arm of Triodos Bank invested Rs 46.11 crore in the Indian lender for a 2.01% stake while Zurich-based responsAbility bought a 1.58% stake for Rs 36.3 crore.

Singapore-based investment firm Olympus Capital purchased a 4.36% stake in Utkarsh SFB for Rs 100 crore. Indian early-stage investment firm Aavishkaar Bharat Fund bought a 1.52% stake for Rs 35 crore. US-based mid-market private equity firm Growth Catalyst Partners LLC bought a 1% stake for Rs 23.05 crore.

Utkarsh SFB will join half a dozen listed peers that went public in the past five years. These include Equitas SFB, Ujjivan SFB, CreditAccess Grameen, Spandana Sphoorty Financial, and AU Small Finance Bank. Most of these lenders are backed by private equity and venture capital investors.

ICICI Securities, IIFL Securities and Kotak Mahindra Capital Co are merchant bankers arranging the share sale.

Glenmark Life Sciences

Another company that received SEBI approval is Glenmark Life Sciences Ltd, a unit of Glenmark Pharmaceuticals which had filed for an IPO in April.

The unit plans to raise Rs 1,160 crore ($155 million) via a fresh issue of shares in the IPO. Simultaneously, parent Glenmark Pharma will sell up to 7.3 million shares in the unit.

Glenmark Life Sciences makes active pharmaceutical ingredients (APIs), or bulk drugs, which are used to produce medicines. Mumbai-listed Glenmark Pharma had transferred its API business to the unit effective January 2019.

The planned IPO comes at a time when healthcare and pharmaceutical companies have attracted greater investor attention in the wake of the global coronavirus pandemic. A global diversification away from China—a key supplier of APIs—towards India is also helping bulk-drug makers in the country.

For instance, US-based private equity firm Advent International acquired Indian bulk-drugs maker ZCL Chemicals earlier this year.

Late last year, Hong Kong-based alternative investment firm PAG joined hands with Indian PE firms CX Partners and Samara Capital to buy a controlling stake in bulk-drugs maker Anjan Drug Pvt. Ltd. Also last year, Carlyle bought a majority stake in SeQuent Scientific Ltd, which makes animal healthcare APIs.

The Capital Quest