Biocon announced that in relation to the proposed primary equity investment by Tata Capital Growth Fund II (Investor) in Biocon Biologics India (BBIL), Biocon (the Company), BBIL and the Investor have executed a Share Subscription Agreement (SSA) and the Company, BBIL, Activ Pine LLP (Existing Investor) and the Investor have executed a Shareholders' Agreement (SHA and together with the SSA, the Transaction Documents).

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Biocon on Friday announced that the board of its subsidiary Biocon Biologics India (Biocon Biologics) has approved a primary equity investment by Tata Capital Growth Fund. As per the terms of the proposed agreement, Tata Capital will invest Rs 225 crore for a 0.85% minority stake in the biosimilar business, valuing Biocon Biologics at an equity valuation of Rs 26,250 crore and an enterprise valuation of Rs 30,400 crore.

Post the completion of this transaction, Biocon will hold 95.25% stake in Biocon Biologics. The equity infusion by Tata Capital will enable Biocon Biologics' future growth through prudent capital allocation, while the company continues to invest in R&D and manufacturing to meet its growing demands of patients worldwide.

Biocon Biologics is engaged in developing high-quality, affordable biosimilars aimed at expanding patient access to a cutting-edge class of therapies across the world.

Shares of Biocon have gained 4.2% in last one month, as compared to a 8.66% rise in Nifty Pharma index.

On the technical front, the stock's RSI (relative strength index) stood at 47.918. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

The stock is trading below its 20 days moving average placed at 414.09 but above its 50 days simple moving average placed at 394.93. These levels will act as crucial resistance and support zones in near term.

Biocon is a fully integrated, innovation-led global biopharmaceuticals company.

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Biocon announced that the Board of its subsidiary Biocon Biologics India (Biocon Biologics) has approved a primary equity investment by Tata Capital Growth Fund. As per the terms of the proposed agreement, Tata Capital will invest Rs 225 crore for a 0.85% minority stake in the biosimilar business, valuing Biocon Biologics at an equity valuation ofRs 26,250 crore, or ~USD 3.5 billion, and an enterprise valuation of Rs 30,400 crore, or ~USD 4.0 billion.

The transaction is subject to standard condition precedents and approvals. Post the completion of this transaction, Biocon will hold 95.25% stake in Biocon Biologics.

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Income from generics business increased 16% YoY to Rs 599 crore while that of the biosimilars business jumped 19% YoY to Rs 692 crore in Q1 June 2020. However, the income from research services remained flat at Rs 422 crore during the quarter due to slowdown of operations impacted by the COVID-19 crisis.

R&D expenses rose 35% to Rs 107 crore in Q1 June 2020 over Q1 June 2019.

EBITDA declined 6% to Rs 432 crore in Q1 FY21 from Rs 462 crore in Q1 FY20. EBITDA margin was at 26% as on 30 June 2020 as against 31% as on 30 June 2019.

Profit before tax in the first quarter stood at Rs 252 crore, down by 21% from Rs 321 crore in the same period last year.

Commenting on the results, Kiran Mazumdar-Shaw, executive chairperson, said: Profitability for the quarter was impacted due to higher R&D spend, lower profit share in the Biosimilars business, and lower profitability in the Research Services segment.

Commenting on the performance, Siddharth Mittal, CEO & managing director, Biocon, said, “The intensified focus on our Generics business over the past year is showing results. The performance was led by the Generic Formulations business, which reported robust growth in the US. We also witnessed good traction in our key APIs during the quarter. Additionally, we expanded the commercial footprint of our Generics Formulations business by partnering with DKSH to commercialize seven of Biocon Pharma's generic formulations in Singapore and Thailand.”

Biocon is a fully integrated, innovation-led global biopharmaceuticals company.

The scrip was up 0.63% to Rs 433 on the BSE. It has traded in the range of 426 and 434.75 so far during the day.

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