IPO Synopsis
IPO Synopsis
Veeda Clinical Research a draft red herring prospectus (DRHP) with SEBI to raise via initial public offer (IPO).
The fresh issue will comprise of fresh equity shares worth up to Rs 331.60 crore and an offer for sale (OFS) of Rs 500 crore by the promoters and existing shareholders.
Investors participating in the OFS include CX Alternative Investment Fund for up to Rs 8.08 crore, Arabelle Financial Services Limited for Rs 90.19 crore, Bondway Investment Inc. for Rs 259.77 crore, Stevey International Corporation for Rs 0.04 crore and Basil Private Limited for Rs 141.93 crore.
SBI Capital Markets Limited, ICICI Securities Limited, JM Financial Limited and Systematix Corporate Services Limited are the book running lead managers for the issue.
Objective of the Issue
The company intends to utilise the net proceeds from the fresh issue
• to repay debt
• fund capital expenditure
• invest in/fund further acquisitions by subsidiary Bioneeds
• fund working capital requirements
• towards general corporate purposes
About Veeda Clinical Research Ltd
Veeda Clinical Research was the largest independent full service clinical research organization (“CRO”) in India based on revenue in 2020.
The Ahmedabad-based company, backed by CX Partners, in recent past announced raising US $16 million from PE firm Sabre Partners, and high networth individuals including Pranab Mody of JB Chemicals, Havells India family office, Nikhil Vora of Sixth Sense Ventures and Arjun Bhartia of Jubilant Group among others. Veeda acquired a 50.1 per cent stake in Bangalore-based Bioneeds India, after it acquired a substantial minority stake in the company to support its capabilities and to offer top-notch clinical service for novel drugs
The firm offers a broad range of services across most aspects of the drug development and drug launch value chain throughout the global markets including North America, Europe and Asia. The services include specialized bioanalytical services such as bioavailability and bioequivalence (“BA & BE”) studies, as well as a full suite of 146 clinical trials including pre-clinical, early phase and late phase clinical trials, together with related service
The firm grown from a single facility in Ahmedabad in 2004 with a total capacity of 62 beds and a capability of processing ~7,000 samples per month to four facilities at Ahmedabad and one at Mehsana, with a total capacity of 532 beds and a capability of processing ~100,000 samples per month in 2021. Post the acquisition of Bioneeds, the firm now has gained pre-clinical trial capabilities with two facilities in Bangalore having 99 exclusive experiment rooms designed as per international standards and self-contained chemistry, biopharma and analytical laboratories. Further, it has also established an innovation-centric bioanalytical laboratory in Ahmedabad under Ingenuity Biosciences.
Veeda Clinical Research Ltd Financial Status
|
Particulars (in Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Revenue |
19.58 |
15.13 |
21.84 |
|
EBITDA |
6.67 |
1.94 |
8.82 |
|
PAT |
6.33 |
0.00 |
4.42 |
|
EPS (basic in Rs.) |
15.39 |
-0.01 |
12.17 |
|
ROE |
37.16% |
-0.05% |
50.20% |
|
ROCE |
26.72% |
3.42% |
75.94% |
|
Particulars (in Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Total Assets |
28.52 |
18.16 |
15.47 |
|
Share Capital |
0.06 |
0.06 |
0.06 |
|
Total Borrowings |
2.43 |
1.67 |
1.03 |
<
|
Particulars (in Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Net cash generated from / (used in) operating activities |
7.66 |
0.91 |
8.20 |
|
Net cash from / (used in) investing activities |
-9.26 |
-0.90 |
-0.93 |
|
Net cash flow from / (used in) financing activities |
1.71 |
-0.34 |
-6.14 |
|
Net increase (decrease) in cash and cash equivalents |
0.11 |
-0.33 |
1.13 |
The Key points are-
IPO Key Points
-
Strengths
• One of the largest independent full services CROs in India
• Extensive scientific competence to service a global clientele ensuring high customer centricity and satisfaction
• Successful track record of stringent compliance culture
• Ongoing investments to provide technology driven CRO solutions and enhance operating efficiencies and compliance management
• Consistent track record of robust financial performance
-
Risks
1. Fail to perform its services in accordance with contractual requirements, regulatory standards and ethical considerations,
2. The potential loss or delay under any of large contracts or of multiple contract
3. With acquisition of Bioneeds a significant number of risks may be involved including, risks arising from change of control provisions in contracts of any acquired company, local law factors and risks associated with restructuring operations
4. Pricing pressures of the contracts including whether as a result of increased competition or fluctuation in the demand for the services or otherwise
5. Keeping up with changes in outsourcing trends in the pharmaceutical and biopharmaceutical industry affects the changes in aggregate spending and research and development budgets
6. Unsuccessful in developing and marketing new services or enter new markets, growth, and business
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