SEBI exempts lock-in after Satyam Scandal, Gland Pharma to release IPO on November 9

The lock-in of shares was imposed by ED in the Satyam Computers fraud case.

One of the fastest-growing generic injectable companies, Hyderabad based Gland Pharma Ltd, is all set to launch an Initial Public Offering (IPO) of Rs 6500 crores. The company has secured an exemption for its shares from SEBI. Gland Pharma’s 3.87 shares were locked by Enforcement Directorate (ED) for a period of one year.  The lock-in of shares was imposed by ED in the Satyam Computers fraud case.

The shares were locked-in by ED as per the norms of the Securities and Exchange Board of India (SEBI). There were around 6 million shares that were being held by 10 companies set up by Satyam founder B. Ramalinga Raju.

Gland Pharma has set a price band of Rs1490- Rs 1500 for its IPO, which will be launched on 9 November. The company will be able to raise 6,479.54 crores via the public issue.

According to the IPO prospectus filed by the company “The ED, pursuant to its letter dated June 16, 2020 (2020 ED Letter), directed the company to transfer such sub-divided equity shares of 10 companies to the Demat account of the ED.” The company is in the process of complying with the directions of the ED, it added.

ED sent a letter to Gland Pharma for attachment of 6,00,000 equity shares (which are 10 million now) under certain provisions of the prevention of money laundering Act, 2002. The ED restrained the company from transferring, disposing, or dealing with the attached shares.

“The attached shares represent 3.87% of our pre-offer paid-up equity share capital and are currently held by 10 companies that are not related to our company, our promoters, our promoter group, our directors or our key managerial personnel,” said Gland Pharma in its IPO offer documents.