Biocon To Use Rs 4,500-Crore QIP To Free Up Equity, Hike Stake In Subsidiary: CEO Mittal

Biocon Ltd., one of India’s leading biopharmaceutical companies, has successfully raised Rs 4,500 crore through a Qualified Institutional Placement (QIP). The funds will be used to repay investors who helped finance the acquisition of Viatris' biosimilars business in 2023, while reducing the overall debt burden of the company, according to its MD and CEO, Siddharth Mittal.  

“We have a bank debt of $1.2 billion and we have obligations to certain private equity investors of $550 million, which we had taken to fund the acquisition of the business that we acquired from Viatris in 2023. So the cumulative proceeds of roughly $520-$530 million will be used to repay these private equity investors,” he said during a conversation with NDTV Profit. 

Mittal confirmed that the company's bank and bond debt level will remain unchanged at $1.2 billion. By repaying private equity firms, Biocon will increase its ownership stake in its subsidiary, Biocon Biologics, from 72% to 79% on a fully diluted basis.

The top executive provided a breakdown of the repayments that will be made with the QIP proceeds.

“The proceeds of the QIP are going to be used to repay some of those private equity investors, including ADQ, whom we repaid already in January of 2025. Now we have a repayment obligation to Goldman Sachs for almost $200 million. And then we have two more investors, Kotak and Edelweiss, where there are certain obligations which are going to come up by the end of this fiscal,” he said.

In an exchange filing dated June 20, Biocon said that it has raised Rs 4,500 crore through the issuance of 13,63,63,635 equity shares of face value Rs 5 each to eligible qualified institutional buyers at the issue price of Rs 330 per equity share. It included a premium of Rs 325 per equity share.

The filing added that the proceeds from the QIP will be used for the “purchase of outstanding optionally convertible debentures issued by our Subsidiary, Biocon Biologics Limited, from Goldman Sachs India AIF Scheme - 1 and Goldman Sachs India Alternative Investment Trust AIF Scheme – 2.”

When asked about Goldman Sachs opting not to convert its optionally convertible debentures (OCDs) into equity, the CEO noted that challenges such as delays in facility and product approvals may have influenced their decision.

 “They had an option to convert it into equity. But today we are all aware that some of the headwinds that we had in the last couple of years were because of facility issues, not receiving the approvals and the growth that the business had, I mean, that probably influenced their decision to not convert,” he said.