July 23, 2002
Source: The Times of India
Avestha IPO eyes a 'Splice' of the market

By Darlington Jose Hector.
TIMES NEWS NETWORK
Bangalore: With the venture capital pipeline choked, biotechnology companies are eyeing the primary market to raise funds. Bangalore-based biotech major Avestha Gengraine has decided to go in for an initial public offering (IPO) next year, after repeatedly facing the not-so-understanding faces of venture capitalists.

India's largest biotech company Biocon had earlier announced that it would take the primary market route. Biocon is likely to go for its IPO next June.

Avestha Gengraine CEO Villoo Patel told The Times of India that with VCs having unreasonable expectations, it was time biotech companies moved on.

"Companies like ours, which have undertaken cutting-edge research, need time and resources. Hence, it was only logical that we decided to go in for an IPO," she said.

Patel said the IPO move would have to be made at the right time, when the investment climate improves. "Most probably; the IPO will happen early next year," she said.

Biocon too had decided to venture into an IPO after finding that VCs were pressing too hard. According to Kiran Mazumdar Shaw, Biocon's chairperson, the IPO has been planned in such a way that it will coincide with the expected launch of human insulin next year. Biocon and Shantha Biotech have formed a joint venture to manufacture human insulin.

Venture capitalists who have invested in biotech industries are increasingly restless, with the gestation period for returns stretching longer than expected.