PE firm CX Partners looks to sell stake in Veeda through IPO
PremiumThe final quantum of the fundraise is yet to be finalized and will depend on the number of shares the PE investor wants to sell
Homegrown private equity (PE) firm CX Partners plans to sell part of its stake in Veeda Clinical Research Pvt. Ltd through an initial public offering (IPO) of ₹500-700 crore, two people aware of the development said on condition of anonymity.
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 80 global regulatory inspections.
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In November 2018, a consortium of PE investors led by CX Partners Fund 2 acquired a majority stake in Veeda.
“Work on the IPO started a couple of months ago. Investment banks JM Financial, ICICI Securities and SBI Capital are advising the company on the IPO. The final quantum of the fundraise is yet to be finalized and will depend on the number of shares the PE investor wants to sell. The company will also raise fresh capital to fund its growth plans," said one of the persons mentioned above. “The pandemic has acted as a tailwind for the pharma sector and many companies in the space, including Veeda and pharma ingredient makers, see this as a good time to list on the public markets," he said.
Emails sent to Veeda’s management and CX Partner did not elicit a response.
According to a Care Ratings note dated 17 March, Veeda reported an operating revenue of ₹152.52 crore in FY20, compared to the previous fiscal’s revenue of ₹223 crore.
“The total operating income (TOI) of Veeda declined by around 30% to ₹152.52 crore in FY20 from ₹223.03 crore in FY19. This was mainly because of a decline in revenue from BA/BE studies, which forms around 80-90% of TOI, by 30%, while revenue from other services declined by 70%. Moreover, on account of lower orders from pharmaceutical companies because of a reduction in spending on research and development by them, the total studies undertaken by Veeda declined by 23% to 279 in FY20 from 361 in FY19 along with a decline in average realization by around 15%," the rating agency said.
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