BCCL-backed Birla Research Lifesciences Eyes INR 750 Million IPO

Date:15/09/11,

IPO,

Domestic Company,

Yash Birla Group’s natural healthcare products firm, Birla Research Lifesciences, backed by ad-for-equity media investor Bennett Coleman & Co Ltd (BCCL) is looking to raise INR 750 million through a public issue.

Birla Research Lifesciences is in the business of ayurvedic medicines with focus on natural healthcare, personal hair & skin care products and diet foods & supplements. These products are marketed under the brand names of Birla Veda, Chant and Nutrinext, respectively. The three-year-old firm markets the products through its chain of Rebirth Stores and also through retail chemists and stockists.

The company plans to use the proceeds from the IPO for setting up a manufacturing facility (INR199.3 million), ensuring capex to introduce more Rebirth Stores (INR 60 million), installing R&D facilities (INR 52.6 million), brand promotion (INR 100 million) and meeting working capital requirements (INR 150 million), besides other purposes.

For the year ended March 31, 2011, the firm had a total income of INR 467.9 million largely through traded products, as compared to total revenues of INR 91 lakh in FY 2010. The firm recorded a net loss of INR 66 million last year that rose over 50% from Rs 41.8 million for the year ended March 31, 2010.

BCCL acquires 29.3% stake in Birla Research Lifesciences last week in a pre-IPO deal estimated at INR 175 million ($3.6 million). The shares were subscribed at par value of INR 10 each.

If this is also going to be the public issue price, Birla Research Lifesciences will see an equity dilution to the tune of 55% valuing the firm at INR 1347 million ($28 million). BCCL’s stake will then shrink to around 13 %.