Through an IPO, General Atlantic plans to sell a share in Rubicon Research

Through an IPO, General Atlantic plans to sell a share in Rubicon Research

In 2019, the PE firm bought a 58% share in the business that develops medicinal items.

Through an IPO, General Atlantic plans to sell a share in Rubicon Research.

According to people with knowledge of the conversations who spoke with Moneycontrol, private equity firm General Atlantic has started discussions with investment banks over the initial public offering of Rubicon Research Pvt Ltd, a business in which it has a controlling position.

In 2019, General Atlantic purchased a 58% share in Rubicon Research. The pharmaceutical products development firm produces and exports pharmaceutical formulations as nasal sprays, oral liquids, and solids. With a wide range of products, the firm serves a variety of therapeutic markets, including those for analgesics, antacids, antianxiety, antihistamines, cardiology, neurology, and ophthalmology.

For the last two to three weeks, the PE firm has been meeting with investment banks to go over several alternatives for the anticipated initial public offering. One of the insiders said, "The negotiations are in their early stages, and the selection of banks is some time away.

"General Atlantic is considering a number of alternatives, including getting out from under the classification of firm promoter by selling a significant portion of its shares in the initial public offering (IPO) and dropping its ownership below 25%. The source said, "The alternative being examined is to keep the majority of its position, accept the promoter designation, and try to sell down its holdings at a later point.

The precise amount of General Atlantic's share sale or the size of the IPO has not yet been decided upon since many possibilities are being considered, the source said.

General Atlantic refuses to respond to a question from Moneycontrol.

Financial Research by Rubicon Research

According to a study by credit rating agency India Ratings, Rubicon Research recorded revenue of Rs 580.8 crore for the nine months ended December 31, 2023, with over 95 percent of the income coming from the US generics market.

Revenues for the firm were Rs 303.8 crore in FY22 and Rs 384.7 crore in FY23.

As of March 31, 2024, 51 of the 61 abbreviated new drug approvals (ANDAs) that Rubicon had were in commercial use. among thirteen ANDAs, Rubicon is among the top three firms by market share, and in six ANDAs, it has a market share of more than twenty-five percent, according to the management. With 11 specialized products—seven of which have received clearance and the other two are in the advanced stages of approval—RRPL is concentrating on the specialty/complex generic market, according to the India Ratings research.

The company's EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased to Rs 86.6 crore in the first nine months of FY24 from a low of Rs 18.4 crore in FY23 and a negative EBITda of 39.2 crore in FY22.

"India Ratings anticipates a strong pipeline of niche launches in the US's regulated markets; and sustained demand for its current products to drive the Ebitda's improvement over FY24-FY27," the rating firm said.