InvestorQ : Why is Serum Institute of Pune going so aggressive in fund raising in the markets?
indhumathi Sayani made post

Why is Serum Institute of Pune going so aggressive in fund raising in the markets?

shrinidhi Rajan answered.
4 months ago

Serum Institute belong to the Poonawala group is currently the world’s largest vaccine manufacturer. It is also a frontrunner in India’s fight against COVID-19. Currently, the Serum Institute of Pune plans to raise $1 billion to mass-produce billions of doses of COVID-19 experimental vaccines supported by its alliance with global firms like AstraZeneca.

Serum is also looking to rope in investors to fund this project and raise $1 billion in exchange for a stake in the company. Adar Poonawala pointed out that the R&D efforts for a project of this magnitude were steeply expensive apart from the huge investments in manufacturing facilities. The fund raising will allow Serum to create a war chest.

In 2015, the Serum Institute was in talks with PE funds to hive off a 10% stake at a valuation of $12 billion, which could not take off due to market volatility. However, the global outbreak of COVID-19 has led to a surge in the demand for pharma and healthcare and Serum could just be placed in a sweet spot to capitalize on the opportunity.

Currently Serum is working in close alliance with a number of marquee global partners like AstraZeneca, University of Oxford, US biotech firm Codagenix, Austrian biotech company Themis Bioscience and American vaccine developer Novavax on similar projects. The funds raised will also help Serum get a good indicative valuation for its franchise.