|Basis of Allotment|
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LAURUS LABS LIMITED
Our Company was originally incorporated as Laurus Labs Private Limibed on September 19, 2005 at Hyderabad, Andhra Pradesh, India as a private limited company under the Companies Act, 1956. Our Company was subsequently converted intoa public limited company and its name was changed to Lauras Labs Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a public limited company was issued by the Registrar of Companies. Andhra Pradesh and Talangana, located at Hyderabad ("RoC") on February 12,2007. Subsequently the name of our Company was changed to AptuitLaurus private Limited and a fresh cenifcate of incorporation consequent upon change of name was issued by the RoC on July 19,2007. Thereafter our Company was converted into a private limited company and its name was changed to AptuitLaurus Private Limited and a fresh certificate of incorporation consequent upon change of name on conversion to a private limited company was issued by the RoC on July 24, 2007. Subsequently the name of our company was changed to laurus labs private limited and a fresh certificate of incorporation consequent upon changes of name was issued by the Roc on February 21, 2012. Our Company was converted in to a public limited company and the name of our company was changed to Laurus Labs Limited and a fresh certificate of incorporation consequent upon changeof name on conversion to a public limited company was issued by the Roc on August 16,2016. For details of change in the name and registered office of our company, See "History and Certain Corporate Matters" on page 190 of the Prospectus dated December 12, 2016 (the "Prospectus").
Registered Office; Plot No. 21, Jawaharlal Nehru
Pharma City, Parawada, Visakhapatnam 531 021, Andhra pradesh, India.
OUR PROMOTERS: DR. SATYANARAYANA CHAVA, NAGA RANI CHAVA, DR. RAJU SRIHARI KALIDINDI, RAVI KUMAR V V AND DR. LAKSHMANA RAO C V
BASIS OF ALLOTMENT
The Equity Shares shall be listed on the BSE Limited ("BSE") and the National Stock Exchange of India Limited ("NSE") and the trading will commence on December 19, 2016.
INITIAL PUBLIC OFFERING OF 31,116,785 EQUITY SHARES OF FACE VALUE OF RS 10 EACH ("EQUITY SHARES") OF LAURUS LABS LIMITED ("COMPANY" OR 'ISSUER") FOR CASH AT A PRICE OF RS 428 PER EQUITY SHARE (INCLUDING A SHARE PREMIUM OF RS 418 PER EQUITY SHARE) ("OFFER PRICE") AGGREGATING TO RS 13,305.10 MILLION* ("OFFER") COMPRISING A FRESH ISSUE OF 7,009,345 EQUITY SHARES AGGREGATING TO RS 2,997.10 MILLION* ("FRESH ISSUE") AND AN OFFER FOR SALE OF 24,107,440 EQUITY SHARES BY THE SELLING SHAREHOLDERS (AS DEFINED IN THE PROSPECTUS), AGGREGATING TO RS 10,308,.00 MILLION* ('OFFER FOR SALE"). THE OFFER INCLUDES A RESERVATION OF 322,164 EQUITY SHARES, AGGREGATING TO RS 125 MILLION, FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED IN THE PROSPECTUS) NOT EXCEEDING 5% OF OUR POST-OFFER PAID UP EQUITY SHARE CAPITAL ("EMPLOYEE RESERVATION PORTION"). THE OFFER LESS THE EMPLOYEE RESERVATION PORTION IS HEREINAFTER REFERRED TO AS "NET OFFER". THE OFFER AND THE NET OFFER SHALL CONSTITUTE 29.42% AND 29.12%, RESPECTIVELY OF THE POST-OFFER PAID-UP EQUITY SHARE CAPITAL OF OUR COMPANY.
* Employee Discount of Rs 40 to the Offer Price (equivalent to 9.35% of the Offer Price) was offered to thte Eligible Employees bidding in the Employee Reservation Portion. All amounts have been included taking into consideration the Employee Discount.
OFFER PRICE : RS 428 PER EQUfTY SHARE
THE OFFER PRICE IS 42.8 TIMES OF THE FACE VALUE
ANCHOR INVESTOR OFFER PRICE: RS 428 PER EQUITY SHARE
Risks to Investors:
I. The four merchant bankers associated with the Offer have handled 30 public issues in the past three years, out of which 11 issues closed below the issue price on listing date.
II. The Price/Earnings ratio ("P/E") based on diluted EPS on restated consolidated basis for FY16 for the Issuer at the upper end of the Price band is as high as 31.75, as compared to the Industry average of 26.02.
III. The Return on Net Worth ("RoNW") for FY 2016, based on restated consolidated financials, for the Issuer is 15.57%, as compared to Industry average of 30.37%.
IV. The Net Asset Value per Equity Share ("NAV") for FY 2016, based on restated consolidated financials for the Issuer is RS 135.06, as compared to Industry average of RS 141.56.
V. Average cost of acquisition of Equity Shares for Promoters of the Company is in the range of Rs 2.50 to Rs 19.40 and the average cost of acquisition for the Selling Shareholders in the range of Rs 60.75 to Rs 181.62 whereas the Offer Price for the public is much higher at Rs 428.
* Anchor investor bid/offer period was one working day prior to Bid/Offer opening date i.e. December 5, 2016
In terms of Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended ("SCRR"), and in accordance with Regulation 26(1) of the Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009, as amended (the "SEBl ICDR Regulations") the Offer was made through the Book Building Process wherein 50% of the Net Offer was allocated on a proportionate basis to Qualified Institutional Buyers ("QlB"), provided that our Company allocated upto 60% of the QIB Portion to Anchor Investors on a discretionary basis, out of which one-third was reserved for domestic Muluat Funds only, subject to valid Bids having been received from domestic Mutual Funds at or above the Anchor Investor Ofler Pnce in accordance with the SEBI ICDR Regulations, 5% of the QIB portion (excluding the Anchor Investor Portion) was available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion was available for allocation on a proportionate basis to all QIB Bidders (other than Anchor investors), including Mutual Funds, subject to valid Bids having been received at or above the Offer Price. Further, not less than 15% of the Net Offer was available for allocation on a proportionate to Non-Institutional Bidders and not less than 35 % of the Net Offer was available for allocation to Retail Individual Bidders in accordance with the SEBI ICDR Regulations, subject to valid Bids having been received at or above the Offer Price. Further, 322,164 Equity Shares were avalable for allocation on a proportionate basis to Eligible Employees, subject to valid Bids having been received from them at or above the Offer Price after the Employee Discount All potential investors, other than Anchor Investors, were required to mandatorily utilise the Application Supported by Blocked Amount ("ASBA") process providing details of their respective bank account which were blocked by the Self Certified Syndicate Banks ("'SCSBs") to participate in the Offer. For details, see 'Offer Procedure" on page 539 of the Prosperous. Anchor Investors were not permitted to participate in the Anchor Investor Portion through the ASBA process.
Please note that non-residents, were not permitted to participate in the Offer, except (i) FPIs (investing under the Portfolio Investment Scheme ('PIS") mute in accordance with Schedule 2A of the FEMA Regulations); (ii) FIIs (investing under Ihe PIS route in accordance with Schedule 2 of the FEMA Regulations); and (iii) Eligible NRIs (investing on a non-repatriation basis in accordance with Schedule 4 of the FEMA Regulations). Further, other non-residents such as FVCIs, multilateral and bilateral development financial institutions were not permitted to participate in the Offer. As per the existing policy of the Government of India, OCBs were not permitted to participate in the Offer. For further details see "Offer Procedure" and "Restriction on Foreign Ownership of Indian Securities" on page 539 and 587 of the Prospectus.
The FDI Policy was amended by Press Note No. 5 issued by the DIPP on June 24, 2016 ("Press Note 5"), pursuant to which, subject to certain conditions, upto 74% foreign investment in "brownfield" pharmaceutical companies was permitted under the automatic route and foreign investment beyond 7414 was permitted under the government approval route. The RBI recently amended the FEMA Regulations vide notification dated December 7, 2016, to reflect the above revised foreign investment limits, and accordingly, subject to certain conditions, foreign investment in the Company, being a "brownfield" pharmaceutical company, is permitted upto 74% without obtaining FIPB approval.
The Offer received 430,404 Applications for 108,970,225 Equity Shares (before technical rejections) resulting in 3.50 times subscription. The details of the Applications received in the Offer from various categories are as under:
The Basis of Allotment was finalized in consultation with the Designated stock Exchange, being BSE on December 15, 2016.
A. Allotment to Retail Individual Bidders (After Technical Rejections)
The Basis of Allotment to the Retail Individual Bidders, who have Bid at Cut-off Price or al the Offer Price of Rs 428 per Equity Share was finalized in consultation with BSE. The category has bean subscribed to the extent of 1.59. The total number of Equity Shares Allotted in Retail Portion is 10,778,118 Equity Shares to 307,948 successful applicants. The category-wise dciails of the Basis of Allotment are as under:
B. Allotment to Non Institutional Bidders (After Technical Rejections)
The Basis of Allotment to the Non-institutional Bidders, who have Bid at the Offer Price of Rs 428 per Equity Share, was finalised in consultation with the BSE. This category has been subscribed to the extent of 3.53 times. The total number of Equity Shares Allotted in this category is 4,619,194 Equity Shares to 290 successful applicants.. The caiegory-wise details (Specimen) of the Basis of Allotment are as under:
* This indicates the total Allotment made to all Non-Institutional Bidders.
C. Allotment to QIBs excluding Anchor Investors (After Technical Rejections)
The Basis of Allotment to QIBs who havo Bid at the offer price of Rs 428 per equity share has been done on a proportionate basis in consultation with the BSE. This category has been subscribed to the extent of 10.56 times of QIB Portion (excluding Anchor portion). As per the SEBI ICDR Regulations, Mutual Funds were Allocated 5% of the Equily Shares of QIB Portion available (excluding Anchor Investors) i.e. 307,947 Equity Shares and other QIBs. including Mutual Funds, were Allocated the remaining available 5,850,977 on proportionate basis. The total number of Equity Shares Allotted in QIB category is 6,158,924 Equity Shares, which were Allotted to 74 successful Applicants. The category-wise details of the Allotment to QIBs are as under:
D. Allotment to Anchor Investors
The Company in consultation with the BRLMs have Allocated 9,238,385 Equity Shares to 25 Anchor Investors through 43 Applications at the Anchor Investor Offer Price of Rs 428 per Equity Shares in accordance with the SEBI ICDR Regulations. This represents 60.00 % of the QIB Category.
E. Allotment to Eligible Employees bidding in the Employee Reservation Portion (After Technical Rejections)
The Basis of Allotment to the Eligible Employees bidding in the Employee Reservation Portion, who have Bid at Cut-off Price or at the Offer Price of Rs 428 per Equity Share (less discount of Rs 40), was finalized in consultation with the BSE. This Employee Reservation Portion has been subscribed to the extent of 1.24 times The total number of Equity Shares Allotted in this category is 322,164 Equity Shares to 994 Eligible Employees. The category-wise details of the Basis of Allotment are as under:
Note : 313 applications for 153,370 shares have been considered in the 490 category pertaning to Applications above Rs 2,00,000 and upto Rs 5,00,000
The Board of Directors of our Company at its meeung held on December 15, 2016. has approved Allotment of the Equity Shares in terms of the Basis of Allotment approved in consultation with the Designated Stock Exchange, being BSE and has Allotted the Equity Shares to various successful Bidders.
The Allotment Advice-cum-Refund Orders and/ or notices are being dispatched and expected to be completed by December 17, 2016 to the address of the investors as registered with the depositories, The instructions to the Self Certified Syndicate Banks for unblocking of funds and transfer to Public Issue Account have been issued on December 15,2016. The Equity Shares Allotted to the successful Applicants have been uploaded on December 15, 2016 to their beneficiary accounts subject to validation of the account details with the depositories concerned.
The Company has received final listing and trading approval from NSE and BSE on December 16, 2016 and the trading will commence on December 19,2016.
Note: All capitalized terms used and not defined herein shall have the respective meanings assigned to them in the Prospectus dated December 12, 2016 filed with the Registrar of Companies, Andhra Pradesh and Telangana, located at Hyderabad.
INVESTORS PLEASE NOTE
These details of the Allotment made shall be hosted on the website of Registrar to the Offer, Karvy Computershare Private Limited at www.karisma.karvy.com
All future correspondence in this regard may kindly be addressed to the Register to the Offer quoting full name of the first/ sole Bidder, Bid cum Application Form number, Bidder DP ID, Client ID, PAN. date of submission of Bid cum Application Form, address of the Bidder, number of Equity Shares applied for, the name and address of the Designated intermediary w/here the Bid cum Application Form was submitted by the Bidder and a copy of Acknowledgment Slip received from the Designated Intermediary at the address given below:
Karvy Computershare Private Limited
THE LEVEL Of SUBSCRIPTION SHOULD NOT BE TAKEN TO BE INDICATIVE OF EITHER THE MARKET PRICE OF THE EQUITY SHARES ON LISTING ORTHE BUSINESS PROSPECTS OF LAURUS LABS LIMITED.