Pharma player Biocon is back in the spotlight—and this time with serious backing. After the launch of its massive Rs 4,500 crore Qualified Institutional Placement (QIP), global brokerage HSBC has maintained a ‘buy’ rating on the stock, even as it trimmed its target price slightly to Rs 390 from Rs 400.
The reason? HSBC sees this fundraise as a much-needed move to ease Biocon’s debt burden. And the stock market seems to agree—Biocon shares rose over 2% on Thursday morning, trading at Rs 349.45, close to the day’s high.
What’s the QIP About?
On April 23, Biocon’s board gave the green light to raise up to Rs 4,500 crore through various instruments like QIP, rights issues, and other methods. The floor price for the issue has been fixed at Rs 340.20 per share, with June 16, 2025, set as the relevant date.
The main goal of this raise? To pay off debt—including optionally convertible debentures (OCDs) issued to Goldman Sachs AIF—and to strengthen Biocon’s financial position as it looks to expand across biosimilars, generics, and research services.
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HSBC Still Likes Biocon—but with Conditions
While the ‘buy’ rating stays, HSBC has updated its outlook. They’ve slightly reduced their target to Rs 390, reflecting expected cuts in earnings per share (EPS) by 11–13% for FY26 to FY28. This is mainly due to higher operating costs and depreciation from new facilities like the peptide API unit and the Vizag fermentation site.
Still, they’re bullish on Biocon’s biosimilars business. HSBC notes that FDA approval and US rollout of insulin aspart could be a game-changer for the stock. These are the milestones investors should watch.
A Step in the Right Direction?
For years, Biocon has struggled to scale consistently in the competitive biosimilars market. But this QIP signals intent. The company is finally prioritizing financial cleanup and future-ready investments. It’s not just about survival anymore—it’s about a possible revival.
Investors and analysts alike will be watching closely. The money’s in, the strategy’s in motion, and the next chapter of Biocon’s journey starts now.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
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