Biocon Ltd, led by Kiran Mazumdar-Shaw, is exploring a merger or share swap with its biosimilars arm, Biocon Biologics Ltd.
The move comes after Biocon Biologics halted its IPO plans amid market uncertainty.
Morgan Stanley has been appointed to evaluate the best value-creation options for the group.
Kiran Mazumdar-Shaw-led Biocon Ltd is exploring options such as a merger and share swap between Biocon Ltd and its biosimilars arm, Biocon Biologics Ltd, to unlock value. The move follows the suspension of the latter’s initial public offering (IPO) plans due to market uncertainty.
Biocon Group Chairperson Kiran Mazumdar-Shaw told The Economic Times on Thursday that the company has appointed Morgan Stanley to evaluate the best value-creation options.
31 October 2025
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The biosimilars segment, which contributes 61% of Biocon’s total sales, recorded revenue of ₹2,720 crore in the second quarter, up 25% year-on-year, with an EBITDA margin of 25%. However, the unit also carries a $1.2 billion debt from its 2022 acquisition of Viatris’ global biosimilars business for $3.3 billion.
Biocon, with a market capitalisation of ₹54,327 crore, holds a 90.2% stake in the subsidiary. The Serum Institute of Life Sciences owns 5.97% as of March 31, while True North and Tata Capital hold smaller stakes. Goldman Sachs and Abu Dhabi-based ADQ were earlier investors in the unit.
Mazumdar-Shaw described the acquisition-related debt as an “overhang” that has weighed on valuation expectations for a potential IPO.
“The valuation we were trying to get for the IPO was under pressure because of the acquisition debt,” she told the newspaper, adding that Morgan Stanley has been appointed to assess whether an IPO, merger, or another route would best unlock value.
In an earlier interview with Moneycontrol, she said, “The IPO market is not very predictable right now. If we are not going to get value for an IPO, then why should we do it? If a merger is a better option, we will do a merger.”
In June, Biocon completed its first equity fundraise since its 2004 IPO, raising ₹4,500 crore through a qualified institutional placement (QIP) to increase its stake in Biocon Biologics and provide exits for some private equity investors. The proceeds were also used to retire part of its structured venture debt.
Biocon’s board has approved the settlement of structured debt with Goldman Sachs (exited on 30 June), Kotak (exited on 1 October), and Edelweiss (to exit by 31 January) through a QIP. With margins improving, interest costs are expected to decline further, with savings of ₹300 crore guided for FY27.
According to a note by JM Financials, the impact of Goldman Sachs’s exit was already visible in Q2 margins, Kotak’s impact will reflect in Q3, and Edelweiss’s in Q4.
