PE firm CX Alternative-backed Veeda to raise over ₹831 cr via IPO

Clinical research firm Veeda Clinical Research Ltd has filed draft papers with the Securities and Exchange Board of India to raise ₹831.60 crore through an initial public offering.

The IPO consists of a fresh issue of ₹331.60 crore and an offer for sale of ₹500 crore by its existing shareholders and promoters.

The OFS comprises shares worth up to ₹8.08 crore by CX Alternative Investment Fund, up to ₹90.19 crore by Arabelle Financial Services Ltd, up to ₹259.77 crore by Bondway Investments Inc, up to ₹0.40 million by Stevey International Corporation and up to ₹141.93 crore by Basil Pvt Ltd.

Currently, CX Alternative Investment Fund holds 2.98% stake, Arabelle has 4.51% stake, Bondway 28.36% stake, Stevey 0.002%, Basil holds 52.42% stake in the firm.

SBI Capital Markets, ICICI Securities, JM Financial and Systematix Corporate Services are the book running managers to the issue.

Around ₹28.7 crore from the proceeds of the issue will be used to pay debt availed by its arm Bioneeds, ₹33 crore for funding capital expenditure, ₹45 crore for investment in its arm for financing capital requirements, ₹75 crore for funding further acquisition of shares of Bioneeds, ₹17 crore for funding acquisition of shares of Ingenuity BioSciences Pvt Ltd and ₹50 crore for funding working capital requirements.

In July 2021, the firm bought a 50.10% interest in Bioneeds which is a preclinical contract research organisation providing discovery, development and regulatory services to the pharmaceutical industry. . As a result of the investment, the firm gained access to two additional facilities in Bangalore having 99 exclusive experiment rooms together with self-contained chemistry, biopharma and analytical laboratories. The firm intends to invest further to buy 100% stake in Bioneeds.

As of March 2021, its arm Bioneeds had total secured borrowings of ₹43.78 crore and total unsecured borrowings of ₹26.66 crore.

Veeda, headquartered in Ahmedabad, offers a range of early and late phase bioequivalence studies and clinical trials to generic and innovator pharmaceutical companies. It claims to have conducted more than 3,500 trials and has developed more than 1,000 bioanalytical methods across generics, new chemical entities, and biosimilars. Veeda has completed more than 85 global regulatory inspections.

The firm has four facilities in Ahmedabad and one facility at Mehsana, Gujarat capable of serving as sites for clinical trials, bioanalytical studies facilities and volunteer screening facilities. The firm also installed 46 bioanalytical systems across its facilities to facilitate in providing efficient bioanalytical services with a capability of processing 1 lakh samples per month as on March 2021. Further, for its per-clinical trials it has two facilities in Bangalore at Peenya and Devarahosanhally with 99 exclusive experiment rooms designed as per international standards.

For fiscal year 2021, its revenue from operations was at ₹195.81 crore against ₹151.27 crore a year ago. Net profit stood at ₹62.97 crore against a net loss of ₹0.43 million. Net debt was at ₹9.36 crore.