Ladies and gentlemen, good day and welcome to the conference call of Suven Pharmaceuticals Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Desa from CDR India. Thank you and over to you, sir. Thank you. Good day, everyone, and thank you for joining us on this call to discuss today's announcement of Advent International proposing to acquire a significant stake in Suven Pharmaceuticals from the Jasti family. We have with us Mr. Venkat Jasti, the managing director, and Mr. Sunder Venkatraman, vice president, corporate affairs. Before we begin, I would like to mention that some statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. I would now like to request Mr. Jasti to share his perspectives on the transaction and his view. Over to you, sir. Thank you, Gavin. Thanks everyone tuning in this afternoon. As you're aware that we have announced that structurally with Advent International Which is known to everybody, I think rather than me telling what it is all about, I would rather answer your question. We will have much more clarity than saying whatever it is existing on the websites and the stock exchanges. I can now take the call, and I can explain the rationale for the deal. Should we start the question and answer session, sir? Please. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Ankush Agrawal from Surge Capital. Please go ahead. Hi, Mr. Jasti. Thank you for taking my question and congrats on the deal, sir. Firstly, if you can clarify a little bit on your role in the business going forward, like, based on what you have provided to the news outlets during the interviews today, what I get is that you would be continuing in your current management role for the foreseeable future till the time, you know, Advent gets Cohance to merge with it, wherein when the entity as a whole will become a bit larger entity and then you will be phasing out in being and then acting broadly as an advisor to the company. If you can clarify on that, sir. Yes, you're absolutely right. That's the way it is. As you know, consummating this deal itself will take five to six months. Mm-hmm. After that, I will continue to run the business. Only when the merger has happened, then only I will be looking after the strategic and advisory role. The aim of Advent and ourselves is to value creation using the added platforms that are existing. We have built certain speed and certain growth and certain capacity. Things are looking good and with these deep pockets of the Advent and their global outreach and the, not only the platform in India and abroad, and they have the reach into the global customers, we can get more business opportunities. Whatever the opportunity that comes in, it is a value-added proposition for which I will be the focus and I will be the advisor on that aspect, and that's the way it will work. I'm keeping my rest of the stake in there as is because I feel, I believe that it will have a value accretion in the very near future. That's the rationale. Got it. Sir, secondly, could you be able to elaborate on the Cohance's business model currently? Suven business model is relatively different from what a lot of other players in India does. If you can help on that front. Secondly, like, from the Suven side itself, like, historically we've been planning to get more on the lifecycle management front and transitioning from the intermediate to API. Would this merger help accelerate that in your sense? I mean, when the focus is towards the value creation, the merger will allow us to use the facilities that are existing and also the customers that are existing. Some of the things which we were not able to do at this time can be utilized using the platform, other side. Those platforms which they are unable to use some of the value-added services, so that will be done at the Suven Pharma thing. Eventually the value-added production and the global reach of the customers to the management systems, management personnel of the Advent, which are in the life sciences field, will be as a helper. Even though, I mean, the Cohance platform is some API and CDMO, the value creation will be the future focus. Sir, lastly, this is smaller one. Does this acquisition changes our existing CapEx plan that we are undertaking? No. No, no. No. Not whatsoever. Business is as usual. There will not be any change. No change in the, even the people, not even a single person will be left out from the acquisition. The cash initiative also stays intact, right? Yes, sir. Okay, got it. That was very helpful. Thanks. Thank you. We have our next question from the line of Sudarshan Padmanabhan from JM Financial Services PMS. Please go ahead. Yeah, thank you for taking my question. Sir, my question is, you know, today when I'm looking at Cohance, you know, largely the business comes from the API part. Whereas I would understand that a fair amount of the sales also goes towards generics. We are, you know, largely focusing on CDMO part with a significant portion with innovator. Can you just, you know, if you can give a little bit more color apart from, you know, the, you know, synergies. I mean, what can add as far as sales, you know, the scale is concerned. Second is on the margin side. I mean, I would understand that Cohance's margin to be significantly lower than our margin. From that side, do you believe that on a pro forma basis, is there any kind of a synergy that can come through and expand the margins? As I was telling you, the platform will be utilized for the value-added products for which Suven is good at it. That's the whole synergy which we want to bring. We would like to utilize the capacities and the capabilities. Also, if you remember, in Suven we're also trying to go and do the lifecycle management for the innovators whom we are working with. For that, I may have to put infrastructure. Right now, that will not be necessary because the platform will have that kind of infrastructure. This will be a value add. Focus will be value adding rather than just going in one direction. That's what the future focus is going to be. The capacities and all those things will be utilized to bring the value addition to the total platform. With respect to the, with respect to the, I have no idea how much their revenues and how much those things for which you were not privy to this. That will be only post the merger it will be known to anybody, and that time we can talk. Right now, the scheme which we are thinking is to go for a value-added using the existing client base and also the clients which the Suven and Advent can bring in through their global sources and global management so that suddenly needed a capacity can be utilized with platform capacity. So this is a value add, which is going to be a synergistic effect, both in terms of the revenue and also on top of the EPS. Sure. With the, you know, them buying the 50.1%, you know, stake of your equity, I mean, I would believe that a part of this would basically go into funding the Suven Life Sciences candidate. From that perspective, would it be, you know, fair to assume that you would have enough funding for the next three to four years? Was it, Suven Life Sciences you're talking? Yeah. I would assume that, you know, part of the money that comes from the sale of this would primarily go. I think you have a wrong notion here because we never think of this to fund the Suven Life Sciences we have to sell this stake. That's not what it is. As you know, even before we have started this, we started way back six months ago to raise the funds through the rights issue, and we have the money for the next few years. Moreover, there are some milestones coming into the Life Sciences. If we are lucky and successful, and that will take you for the next 10 years. Funding for Suven Life Sciences is as always we've been doing, we'll be doing it. Not necessarily by selling one stake and we have to put it. That's not the intent. Yes, sir. Thanks a lot. I'm done. Thank you. Ladies and gentlemen, in order to ensure the management is able to answer all queries, kindly restrict your questions to two at a time. We have our next question from the line of Darshit Shah from Nirvana Capital. Please go ahead. Hi, sir. Congratulations on the deal. So, so from what we understand is that, this is a platform that Advent has created, you know, to kind of become a market leader in India in terms of API and CDMO. From all the three companies which currently they have under this basket, I think 30%-40% is CDMO and rest is API and specialty chem. Post probably merger, I think still the CDMO business will be more than 50%-60% of the overall revenue side. In terms of synergies, I mean, since you have been in talks with them for a quite a long time, if you can throw a little bit more granular detail on what's the roadmap for them? How are they planning to take this overall Cohance thing over the next three to five years? You know, this will be really useful for the minority shareholders like us to, you know, stay put with the new promoters. I mean, anybody would like to have a value-added proposition, what was, we're bringing to the table. We have the huge capacities and capabilities. With our value-added roadmap, then we can integrate that towards that. Also, as we were telling you earlier also, when the outsourcing is happening much more, including the lifecycle management of innovators, and this will be a value-added proposition again. At the time, Suven don't need to spend money to create infrastructure. The existing infrastructure will be focused towards the value-added products. That, in general, the value addition and the synergistic business concept will be given, and more offerings to our customers. That means they will be getting from nuts and bolts to the all the way to the formulation. This is the way we are thinking. Got it. I'm actually summarizing basically that, the process which we were envisaging of, you know, lifecycle management, where we were trying to move higher up the value chain. That process anyway is on track and further opportunities, if that comes, we'll be able to use this platform and experience the growth which might happen in Suven. Otherwise, it would have taken a little longer to put up facilities. Yes. Because some of these platform companies are already doing some of these activities with some of the innovators. We can combine all these things and we can give you more offerings to them so that they don't have to go to different people. That way, this will become one of the top, one of the top three CDMO players which caters to from the what do you call, innovation supply chain to the lifecycle management of the innovators. That is the third product. Sir, lastly, on the roadmap since, you know, the president of Advent talks of making Suven a billion dollar company over next few years. I mean, that's what the roadmap basically talks. That's a phenomenal kind of a positive that Advent is looking from Suven. Would that be a right understanding? I mean, I think we need to ask that to Advent. Right now, our focus is using this platform, giving more offerings. My job is to get the more value-added products into the pipeline, which naturally will give us the bottom line, better bottom line growth and all that stuff. With their capabilities, and global, I mean, outreach, I think, they may have a roadmap to bring this revenues to $1 billion sooner than later. That is their outreach when they start coming into the picture. Right now, our job is utilize whatever we have in this partnership, make it a value proposition to the customers, and in turn, it is a synergistic, I mean, value proposition to our shareholders. Thank you, sir, so much for answering this question. Thank you. Thank you. We have our next question from the line of Mayur Parkeria from Wealth Managers India Private Limited. Please go ahead. Good afternoon, sir. Am I audible? Yes, please. Yes. Sir, congratulations on the deal. Sir, I have two questions, sir. One is, sir, Suven has always been a very respected corporate, high corporate governance and a very well, you know, in terms of the domain and expertise and your own image and your own, this has been very respected in the industry and across the investors along. Sir, from that perspective, just I wanted your comments on, sir, the stake which you plan to retain. Sir, is it from a longer-term perspective, which will... Because from an investor perspective, that may create a kind of an overhang if, you know, because you have already sold 50%. Will you like to just comment something on from the perspective of timeline which you look at for the stake which you will be holding? As of now, there is no thought process of relinquishing that. I feel that value creation will happen because we skill this to the value creation side by using all the infrastructure that is there, by using all the client base that is there, by giving additional opportunity to the offerings to the customers. I feel that value will be much higher. We don't have any thoughts of relinquishing that at this time, and we'll keep holding our shares. As long as we create the value creation, not only the shareholders, but ourselves. That's the way how we are thinking. Sir, do you think that value creation process can start happening in the near term itself from the next three years perspective also, right? It should happen now when we start using the total platform and giving. Okay. expanded offerings. I mean, it may not be overnight, and it may not be in one year, but in the... Got it. three-year period, yes, it should fructify into the next level of proposition. Okay. Sir, the last and second question, was, sir, since, you know, there is a proposal along with this itself that, they will merge the Cohance, you know, the platform along with this, there is a proposal. You know, from a revenue perspective, more or less, Suven and that entity are more or less pro forma, not very different, right? I'm sure there would be some understanding on the valuations of those companies also. Because your stake would also get diluted, when that company gets merged. Any color which you would like to give us understanding on what kind of valuations will, you know, will happen over a period of time? It's very difficult to tell the day one what kind of valuation will come, because we are working towards the value creation. I mean, if you think that it will be diluted and all that stuff, you don't think you want to keep the stock, right? That's not what our thinking is. By bringing the existing platform and the credibility and the capability, and also by having the deep pockets of our partner, and also having the platform of the partner, not only in India and abroad, and also the knowledge they have in the pharmaceutical field, they can bring through their management systems, more business opportunity, which will be towards the value-added products. That's what the whole aim is about. Whatever they have now, that will be transformed into value-added services. That's what the idea is all about, and it will take about three years before you start any big jump on that one. That's what I feel. Sir, I was just wondering, what is it that Advent gets for Suven on the platform? While they may get benefit with your, you know, your expertise, and you will get value-added products even for that kind of entity and overall one plus one can be much more. From a Suven perspective, since you're going to continue to run the entity for some more time, what is it that they bring on table for you, or for us as shareholders, in terms of, you know, in the next one year? How does it help us in that sense from a Suven perspective, sir? Vikas, I bring a new perspective for the existing team in the sense it's a value creation. How do you value create and how do you focus and how do you strategize? That's what I bring to the table along with the what we do. That, with these additional capabilities and capacities and strengths, we can fast-forward much quicker and much better. That's what I bring to the table. That's what they are getting. Okay, sir. We wish you all the best then, sir. I look forward to discussing more later. Thank you. Thank you. We have our next question from the line of V.P. Rajesh from Banyan Capital Advisors. Please go ahead. Hi. Thanks for the opportunity. My first question was regarding the timeline of this merger. Would it be that the open offer will get done first, and then after that, you will get into the merger discussion? Will it run simultaneously to the open offer process? If you can just throw some light on that. The merger will be post the open offer only. Only when Advent comes into the picture, when they buy stake from ours and the open offer, then only the activity will take place. Not until that time. Okay. I was just curious, sir, that it could have been easily that you could have bought that business first and then, you know, thought about selling your stake because you would have been running a much larger company, as opposed to selling your stake at this point and letting Advent do whatever they want to do with the ongoing business. Any comment on that? I didn't understand the question. Sorry. My question is that, you know, rather than selling your stake to them first and then letting them do the merger with their private entity, we could have bought the private entity from them, and then afterwards you could have divested if needed to divest your stake in the combined entity. Because the concern, I'll tell you the concern is that once Advent controls public Suven, they can decide whatever that merger ratio is going to be. That's what I was, that's where I'm coming from. No, the ratio will be dependent. When the merger takes place, by the time based on the fundamentals, it will be worked out. It's not just with whims and fancies it will not be done. It has to be done based on what do you call, the EBITDA of this company versus EBITDA that company, we share the structuring will be done like that. I don't see it that way. I think what we need to bring is bring speed to the growth, speed to the growth along with the reach of the global customer and having additional infrastructure and capacity, all those things, and also bringing into some of our non-offerings will be offered by Cohance. You know, some of the non-offerings by Cohance will be offered by Suven. This way there will be a cross-selling and in the beginning, then it will be a merger, you know, the timelines it will take. Meanwhile, we can take it to the customer. These are the offerings in total which is going to double our capacity and capability in terms of the people and the volume and the R&D personnel and all that stuff. The focus would be towards the value creation. Understood. Thank you so much. That's all. Thank you. Ladies and gentlemen, in order to ensure the management is able to answer all queries, kindly restrict your questions to two at a time. We have our next question from the line of Amar Maurya from AlfAccurate PMS. Please go ahead. Hello. Yeah. Thanks a lot for the opportunity. What I can understand is that, with this merger, the Suven listed entity will get benefited largely in terms of the business opportunity is more from the lifecycle management. Right? Let's say, I mean, whatever is the capacity which we got from the Cohance, I mean, if Suven would have those capabilities, what kind of a lifecycle business we would have been able to cater with this kind of available facility? I mean, it's very difficult to give you numbers at this time. The strategy what we're talking about is not only the capacities but also the reach of their global footprint in the pharmaceutical field, which can give you additional opportunity for those places where we are not working can be there. Already they have some of the innovators in their things where they are doing the lifecycle management. The same thing can be done here for those whom we are working. We don't need to look for the capacities and the capability. This is going to be a strategy which we are going to apply for the faster growth and value creation. This is the way we are looking at it, not just the generic purpose only. That's the whole purpose that will be merged into Suven eventually. The otherwise we will be utilizing the total, not only the people, not only the capacities, but also their global reach to the customers which they are being very much engulfed into. Sir, basically what I'm trying to understand here is, like, you know, actually you are talking about a cross-sell opportunity, which you are looking can be very large and that can help to the existing business as well as to the lifecycle management business, right? Yeah. Existing business and lifecycle management and also new customers are things with the, what do you call, if Advent has a reach in the global footprint by having other players in the, not in India, abroad, and they can bring that to the table here, the value-added products what we are doing. Correct. The focus with which we are doing. That will be an additional thing. As you rightly said, capacity can be created, but getting the clientage to the site which will fast-track the activity, that is one thing which we are looking for. Okay. So basically, sir, what I think everybody is trying to understand is that, do you see that the cross-sell opportunity from the existing Cohance portfolio as well as the Advent global reach, would be very significant for you? The total thing will be eventually, right? Yeah, yeah. That's what the intent is all about, to get to that point, speed up. Right now we are growing at 15%-20%, and we still speed up things, but how fast we can go to the next level is only time will tell. Yeah, I got that. Basically what you're saying here is that, let's say, you as a company, I mean, on an individual basis, were growing at a certain speed, this will enhance your speed significantly. When we say the speed, like say, you know. Not only the speed, and also the quantum. Also the quantum. Right. So that is- Right. Okay. Basically, I mean, just simply trying to understand, let's say, sir, I mean, probably you would have doubled the revenue in 5 years at a 20% CAGR, right? Can the speed come to 2 years by this, by incubating all these accelerators? Possible, sir. I mean, in the drug, in our field, as you know, when some of the molecules goes into commercial, sometimes you get the doubling effect. Similarly, this can also happen, but this is very early to tell you that way how fast we can do to that time. We have to utilize that whatever the opportunities that are existing because of the portfolio companies and also the deep-pocketed, deep-rooted, Advent global footprint, which we need to bring it up. That can take it, yes, it's possible to do it in 2 and a half years. Why not? One last, sir. Like, you know, if I see the merged entity now would have 35% kind of a margin, right? When we increase our lifecycle portion of the business, will the margin dilute further? Not necessarily. When we're talking lifecycle management, means we're not doing just the generic-type lifecycle management. We are talking about the innovator lifecycle management. Always this have a more value creation compared to the pure generics. That's what our aim is. That's where we are going to steer our growth also. In addition to the attracting more customers, but also that kind of things. Okay. Basically the merged number, merged kind of a margin you tend to maintain over a period of time. That's what I would say. Okay. Perfect, sir. I'll come back in queue. Thank you. We have our next question from the line of Sunil Kothari from Unique PMS. Please go ahead. Thanks for opportunity, sir. Congratulations for achieving your objective well in time. sir, my question is, you have nurtured Suven Pharma as your baby. I mean, your employees, your customers, the way you have relationship with your innovator world's biggest all pharma companies. How Advent, how those customers and your employees and your team will be comfortable with this Advent coming in? I'm sure you must have taken care of. Would you like to say, talk about some qualities which Advent will bring, which will give comfort to your all, I mean, very experienced team, R&D capabilities and your customers? I think, we have, because reach is easy with our, I mean, our employees, there is no problem whatsoever. We also reach out to the customers, and we have given our commitment to run the business as usual with the same commitment and the focus with which we are doing it. There will not be any change in the personnel, and Advent is also committed to do that. As I was telling earlier to the customer, our aim is using this platform to bring in value-added products into the pipeline and steering towards that area rather than just doing this volume-based activity. Great, sir. Sir, my question is a little bit more from the my concern is Innovator was always comfortable with the Suven Pharma and Mr. Jasti. with this new team, you feel... They are very new to this field. They have just taken over two, three companies during last two, three years. They are private equity investors. On from that point of view, what's your thought process? They have asked us to continue to be active in the business directions and the strategy, and which I said I will do it, and I will continue to focus on that. They are committed to this. The reason why they came into this is to have these value additions, and they don't want to spoil the broth by doing unnecessary things. As a matter of fact, they want to steer the all other platforms also into the value-added products. That's where the intent is. I mean, everybody will have an apprehension. We will be also having apprehension in the beginning. As you are committed and focused as we were all these years, which they promised we will do, I think we'll have a great way for the future growth of this organization. Thank you, sir. Wish you good luck. Thanks a lot, Sunil. Thank you. We have our next question from the line of Ananda Padmanabhan from PGIM India AMC. Please go ahead. Good afternoon, sir. Thanks for taking my question. Congratulations on the deal. I missed your initial part of the comment. If you could just again repeat in what would be your involvement in the business post that completion of transaction and post-completion of merger? At what level would you be engaging with this company, in the combined company once the merger happens? Because the purpose they have taken our company is not only based on the generation of the revenues and all, but also the focus with which we do the business and also the value-added creation, which my job is to bring the total platform into the value-added services. I will be doing the strategy and the customer interface to continue the business, continue the commitment as long as I am there with them, and that's what the intent is. They want to just speed up as fast as they can, and they don't want to do anything that changes the mindset of the innovators, because that's where the growth and both on the top line and bottom line will be over the years. That's what the hope will be. You Once the merger gets complete, you would continue to head the combined entity? Or at once the merger gets Yes, I'll be working for the strategy and the guidance and all that stuff. Okay. Okay. If you could also highlight on how did you have sold substantial portion of your holding, if you could just give a broad thought process on how did you decide in terms of the valuation at which you have sold it? It seems to be more closer to the current market price, where generally the trend is when the, you know, promoter is selling a controlling stake, they get some premium for parting with the controlling stake. Yeah. I mean, it has its dos and don'ts, as you know. When we started the activity, price is completely different and, now the price is set the market price. You cannot go by... Otherwise, you know, I mean, two years ago, if I sold, I should have gotten 600, right? In this business, it not works that way. All right, we have taken a decision, and, we saw that, there is a valuation will be coming in, and, we want to... The only reason we gave a little bit more than what we thought of giving is because they would like a controlling stake because they are bringing the platform to the table and they are going to do more, more investments if needed to go for the next value-added product portfolio and things and bringing the customers. We are, as I said, we are going a certain level and we are comfortable at that. We thought this is the right time for the growth into a much faster pace in a value-added manner. I thought it was a better thing. I think that's what the thought process. Okay. My final question, sir: If you compare the CDMO business of Cohance vis-à-vis the CDMO business of Suven, what are the key differentiating factors between these two businesses in terms of client, in terms of the extent of engagement or the kind of products that you present? What are the key differentiating factors? I don't have much deep knowledge of the Cohance side, but what I'm saying is, naturally there will be different client deals and, but they also have a lot of innovative client deals where they are working in the API part of the business, and that will be useful. The capacities are there, R&D strength is there. Again, the other thing is the Advent deeply rooted penetration into the pharmaceutical world through their management team, which will bring more value to the. This is what the thought process is. I have not done a deep dive into the Cohance portfolio. Thank you, sir. I'll get back to the queue. Thank you. We have our next question from the line of Nitin Gosar from BOI Mutual Fund. Please go ahead. Hi, sir. Thanks for this opportunity. Can you cite out any example in past where a company has been merged with this kind of offering with the likes of Suven and Cohance offers? I can't hear you. Can you speak up? would you mind citing out any example in past where a company like Suven and Cohance with the kind of product offering they are giving have been merged? I don't have any idea. I think this is maybe the first one. I don't know. I have no idea. I have not gone into researching the things that have happened based on that only. I told that's not the reason why I sold, and I told you why we were sold and what value creation can come. I have not done any kind of research on that aspect. Okay. Another two questions. How comfortable we are with the client, or how comfortable the client would be to work with a promoter-driven entity that we have seen in past, the way they were comfortable with you, versus a strategic partner, who is running the CDMO space. You know. We have our discussions with various players, and as long as the way you're running the business, the commitment you have, the focus you have, without any changes in the things, they have no problem whatsoever. That's what our gut feeling is. Okay. One last question. This is just an observation. One of the recent episode where Advent International is acquiring a company which is outside pharma space, but it seems, you know, they have given a kind of uncomfortable P&L outcome to the minority shareholders, plus the buyback offers have also not been that great. How do we ensure that the minority shareholders' interest has been taken care of with this transaction going forward with the same entity? Already they have announced the open offer with the same price what they are offering to us. Okay. Thanks. Thank you. We have our next question from the line of Julie Mehta from Ratnabali Securities Private Limited. Please go ahead. Hello. Yes, ma'am. Hello. Thank you for the opportunity. My first question pertains to promoter retaining almost 10% stake in the company. I wanted to know if there is a lock-in for the same or not. No. Naturally, the lock-in will be there, 18 months. Okay, sir. My second question is regarding the open offer. Post-merger, assuming 0 acceptance in the open offer, what will be the holding in the merged entity by Advent? Depends on the open offer success. Okay. That I think you need to ask the Advent. That's not, like, acquirers', thing. Which we cannot tell. Julie, does that answer your question? Okay, sir. Yeah. Thank you. no, that's it from my end. Yeah. Thank you. Thank you. We have our next question from the line of Abdulkader Puranwala from Elara. Please go ahead. Yeah, hi, sir. Thank you for the opportunity, and congrats on this deal. On this $1 billion revenue, what the new entity would be, you know, aspiring to achieve? I mean, what could be, you know, the product mix over here? I mean, when we talk about the innovative CRAMS business as well as the generics. Post this merger happening, I think, you know, from 8%-9% of your business coming from generic side, it will move up to close to 40%. Sir, at $1 billion, you know, how should we see the mix, you know, going ahead? I have not given the statement. I think you need to ask the Advent of that. Our strategy and focus is still towards the value creation using the existing infrastructure and the global footprint. That's what we're looking at it. I have not looked in their direction why they quoted and when they how they arrived at. I have no idea. Okay. Okay. When you know, make that statement... From the current Gross Block, what do we have? you know, that is barring Casper, I think FY 2022, we had a Gross Block of close to INR 680 crores. you know, what could be the potential revenue, you know, the new entity could derive from this, Gross Blocks what we already have on block with us? I have no idea on that, sir. Right now, I can only concentrate on what we're doing now. First of all, the deal will only happen sometime five to six months from now. Meanwhile, my concentration will be on the team existing things. When that adds. As I said, I do not have to deep dive into the Cohance. That needs to be done post the acquisition. Only I'll cover the picture. My strategy for them and was, and is, and will be that it is a value creation for the platform, which takes the much more value-added product, and with their global footprint, we should be able to do that, and with the expanded capacities and we can do that. Right now I cannot give you all those details, but, our focus is that way. Okay. Just final question, if I may. you know, when we talk about this entire merger happening, I mean, I understand it will be still 5 to 6 months away, any color how this entire deal will take place? I mean, in terms of the merger, will this be done through a share swap where, you know, we'll be issuing, that is Suven Pharma would be issuing fresh shares, for Advent or Advent, I mean, this might be done through a leverage buyout wherein, you know, debt funded would happen because, I mean, if you look at the three entities, what Advent has acquired, you know, which would be merging with us, the quantum looks pretty high. Any color on that front? The scheme of demerger, you know, the scheme of merger will happen post, you know, completion of this, you know, closure. Once this is completed, those valuation perspectives and other things will be revealed by Advent as we move on at that point of time as a part of the document. At this point of time, we have not evaluated and we've not gone into the details of those things. Sure, sir. Got it. Thank you. Thank you. We have our next question from the line of Raj from PTI. Please go ahead. Hello. Hi, good afternoon. Mine is just a clarification. I joined a little bit late. How much stake would you be promoters selling off out of the 60% you have, and at what valuation? No, we are selling about 50%. 50.1% is the stake that is on the overall capital that is being sold. You're saying, the promoters will be left around the 9.9% stake? That is correct. Okay. What is the total value? There's some reports saying it is around INR 6,300 crore. Is Is that correct? Correct. Okay. Thank you. I'll come to the line again. Thank you. Thank you. We have our next question from the line of Ashish from IIFL. Please go ahead. Yeah, thanks. there's some media flash which, you know, says that the combined entity will have an EBITDA margins of 50%. Is that a right number? I don't know where the media has come. We cannot give you the combined entity thing because it's not even merged. I mean, it's not even taking place. It will take another 6 months from now, roughly. After that only the budget process will happen. That budget process, as you know, will take 9 to 12 months maybe. I don't know where you got all these numbers. We have not said anything. We have not arrived at that number. Okay. Yeah, fair enough. Sir, we did speak about synergies. Are there any immediate synergies, say in the next 12 months, which can quickly show in our numbers? I think we will be going aggressively to the customers and also trying to get the new customers and, but the business where we are value-added products, we are cutting it into the innovation side of the supply chain, and it will not be overnight. It has to be nurtured into. Once you get into there, then that will have a compounding growth. Yeah, fair enough. Just one last question. Obviously, as a Suven standalone entity, we always focused on, you know, margins and, you know, we never wanted to dilute our 40% plus EBITDA margin profile. With now the Advent business is also coming in, the focus initially would be on gaining scale and, at the cost of margins or how it would be? I don't know what they do, but my strategy was to make it that they say use that as a leverage to get the value-added product in the kitty and also getting more customers and doing more offers, I mean, offerings from the boutique. That's what we are thinking. The strategy will be done by the Advent post the merger. Until that time, I'll be running the business, and I'll be giving the strategy to have a value-added product portfolio. Okay, sir. There's the last one. When would the open offer open up? This is contingent upon the CCI and the EPA approval, right. It can happen 3 months, 5 months, 4 months. Okay. Yeah. Perfect. Thank you so much. You're welcome. Thank you. We have our next question from the line of Avnish Khara from VT Capital. Please go ahead. Hello, am I audible? Yes. I just had one question I wanted to understand. You focused a lot on how Advent will be adding value, by, helping us accelerate the speed and quantum of our business. Is it safe to assume that, organically growing was, becoming an issue for us for some, reason? I think you have misunderstood. I said we can go into the next level with their portfolio companies and also Advent's global footprint in the life science industry, they can bring it to that. See, I mean, as you know, we have certain speed with which we're growing. If you want to grow much faster and speedier, you need to get into the inorganic also. For that, you need to have also deep pockets. I think we have the deep roots, deep pockets and the deep infrastructure and the enhanced capabilities and capacities. All this will mix into a part of things which will speed up the activity. Not that we cannot do it. Yes, I can do it, but as you know, to grow this, we are growing at 20% maximum. Of course, success also will make it much more faster. This will speed up that activity much faster after a couple of years. That's it from my side. Thank you so much. Thank you. We have our next question from the line of Amar Maurya from AlfAccurate PMS. Please go ahead. Yeah. One just clarification. Like, you know, in Suven, Advent has taken 60% stake. All the other entities which they had acquired, they are the 100% owner into that, right? I mean, there are not multiple promoters coming into the board with this merger, right? No, it's very difficult for us to answer. We don't have those portfolio. The company is what stake they have in different company. In this company right now, the intention is to acquire about 50% from promoters, and there will be an open offer of 26% of which whatever is tendered, we will know only after open offer is closed and completed. We do not have, at this point of time, the complete details of, you know, Advent current portfolio, what is the stake in which company where we have in deeper details. Probably. I'm just trying, like, you know, before the merger, we would have got the, like, the Cohance is 100% owned by Advent or it is like, you know, there also they have the minority shareholder of all these different entities? See, the majority is being handled by, you know, Advent. We have not gone into the details of the merger yet. The current valuation, current aspect, what we are looking at is that Advent acquiring a stake in Suven. The merger proposals will come only after this is completed and those details will be, you know, put on. We need to get the DoP approval, we need to get the CCI approval, we need to close the deal, then we'll be getting into those details. We have not evaluated those parameters as yet. Okay. Fine. Does that answer your question, sir? no. Basically, I'm just trying to understand that, you know... I mean, I can understand that, you know, those details can be evaluated, but as a... I mean, because you are going to hold 10% stake in the merged entity or 7% stake in the merged entity, I'm just saying, you know, we should be aware, right? That who all are going to join me into the new entity? It is Advent that is holding the majority stake in these three companies. If you have, you know, you can go and just check in their website, in the Cohance Lifesciences, there is a website from which you will have more details about them, what kind of capabilities, what kind of things. The financial figures and those details are not available for public at this point of time, being an unlisted company. Okay. Perfect. Mr. Maurya, are you through with your questions? Yeah, yeah. Thank you. We have our next question from the line of Rahul Jain, an individual investor. Please go ahead. Yeah, thanks for the opportunity. Am I audible? Yes. Yeah. I have 2 clarificatory questions. First, that in our press release, we say that Advent is gonna acquire X% stake in our company and then there is going to be a subsequent merger. The merger details, as I hear on the call, is something which is not known. The management is retaining 10% stake in the merged entity or not, or in the entity which is pre-merger. This is also not clear. Can you just throw some light, help all of us understand what exactly is gonna happen in the merger? Because in the press release issued by Suven, you all have spoken about merger, but then merger details are not available. They will be available after 6 months. The management is retaining control or 10% stake in the company, there are no details. Who are coming in with this merger in the merged entity? We as shareholders want to know this. One, this is my first question. My second question is, you just mentioned that there is a 18-month lock-in that the promoters have taken on the 10% stake, correct? Now, post-merger, whether you will have 10%, what happens to your lock-in shares if the merger approval comes prior to this 18 months? These details are also not available in the press release. If you could just help us understand what exactly is the current promoter gonna do in the merged entity, how will this entire transaction happen? At this point of time, you know, the current promoters, Jasti family is giving 50% of the overall company to Advent International as a standalone. We have another 10% is held under the current. Post-merger, which is, you know, the release given, what we released is what was given to us from Advent International, that, you know, they are acquiring. As a part of it, the seller forced the share purchase agreement. They are supposed to release it, we have released it. The merging part of it, what you are talking about is they have a Cohance as a platform in which there are 3 other companies are there which is giving. Those details are provided where, you know, these valuation as well as the merger aspects, they'll be coming up later, post DoP approval and acquisition from the current promoters. Until then, this 10% is on the standalone Suven Pharmaceuticals what the promoters will be holding. The 18 months is a continuing transition period for which, you know, the support will be there from Mr. Jasti towards this entire transition and also the acquisition that is being happening now. Post to this 18 months period actually, and post whatever we call it as Even the merger would have been completed. The dilution of the promoter stake of 10% would have come down to a different value. That value will be determined. Those are the merchant banker valuing the entire thing and coming out with it. Today, you know, it should be difficult for us to come out with a swap ratio and say clearly, like, what it should be there actually. Based on the valuations at the time of the merger documentation and the bankers valuations and based on EBITDAs available at that time, swap ratio will be determined. Okay. Based on that, this 10% can be down by the same swap ratio. Okay. sir, if I may just ask you then, if I understand this correctly, the reason why we mentioned this merger was something because the buyer wanted us to mention. The details of the merger or details of this is not known to us right now. You have to see it in a different context here. First of all, we are trying to sell something, and the buyer is trying to do something with this acquisition. We are giving everybody the what is the rationale in doing this. These things will come as and when it is applicable. I cannot put a number today because I perform much better and my EBITDA is much better, so I get a much better swap ratio compared to the other platform. This will be done by the merchant bankers at that time. We cannot give you all those things without even the deal has not happened. First this thing has to happen. We are only giving you what is the prospect for the future. Also in the release, what Advent has informed us is like, you know, they will explore the possibility of merger. You know, I don't know whether it is going to be that. It is later they will be announcing it. We will not be talking on behalf of Advent at this point in time what they intend to do. At this point in time, the company's value, and we have a much larger platform to offer as a service to the global customer on a continuing basis as the current, you know, global consolidations are happening. This is one of the, you know, area in which we wanted to focus on to offer a better service to the global customers to ensure that actually we are part of the global game. Are you trying to hint that the merger may not happen? What is that? I cannot say that at this point. They only use the word, if you really see Advent intent post completion of this landmark acquisition, Advent intend to explore the merger of the portfolio company, Cohance, with Suven, to build a leading end-to-end CDMO and merchant API player servicing the pharma and specialty chemical markets. That is what the release, what they have given. Today, the merger, what we are talking about is what if all, you know, it is based on the events happening. That is the reason. I'm reading only from the release what is given. Okay. Just my last point. You are trying to say that you have mentioned it in your press release. You are just trying to justify the rationale. Justifying rationale without any numbers to it, I don't think that is too comforting for anyone. At least for me, it's not comforting. Any rationale which you give, and if it is not substantiated by numbers, I don't think that will make any sense to anyone. Let's wait for your merger details to come before we can do something about it. Thank you so much. Yeah. I think we should wait for the merger details to come from Advent. We at Suven, at this point in time, will not be able to talk about that. Thank you. We have our next question from the line of Vainatheyan, an individual investor. Please go ahead. Hi. Good afternoon to all of you all. I would like to just ask you, whether post-merger, the name of the company will be changed from Suven Pharma to Cohance, or Cohance will be merged into Suven and Suven will be listed, still listed on the stock exchange as a company maybe. That is not at all taken care of. This is right now is I mean, Cohance will be merged into the listed company. Okay. What happens to those people who have rejected the open offer in the sense want to retain their existing stake in Suven Pharma and take a chance as to what will, like, what can happen in the future? No, no. Those people want- When the merger takes place, whatever happens is the swap ratio. The number of shares will be in the same ratio as the swap ratio, and the valuation has to be much higher. There should not be any value depletion, but it will be done, but it's only value accretion, even though number of shares are less. Okay. That thing is assured that the investor would not lose, like below this 495 or whatever they are offering, below this, the investors would not be forced to. That is a business that you need to look into that and based on the, what you call, the merger swap ratios and all that stuff, that will come into the picture later. Right now, how can I say today if you buy not only this company, any company today you buy at what certain price, tomorrow market goes down. Somebody gives you guarantee. It's not like that. It's the way. Why anybody buys this? For value creation. This is what Advent is trying to do, the value creation. Nobody wants to lose money, right? Mm. They will not pay like this, right? If they want to lose money... If you, if the investor is, I mean, if the shareholder is losing, the investor is going to be losing also. This is not the intent, and that's a hypothetical question we cannot answer at this time. Okay. No problem, sir. Thank you. Thanks for taking up the question. Thank you. We have our next question from the line of Pritesh Vora from Mission Street India. Please go ahead. My question. Thank you very much for opportunity. My question is, post this acquisition, how do we minority shareholder get assured that whatever the merger ratio happens, because I understand our company has a higher EBITDA margin than the Cohance portfolio, and our growth rate is also much better than the Cohance portfolio. How do we ensure that merger happens whenever it happens? When it happens. Benefit of minority shareholder? Yeah, yeah. As a minority shareholder, by the time, after the, what do you call, the acquisition, the Suven promoters are also minority shareholders. They will, I mean, it is one and the same to everyone. We are all... See, it has to be on the valuation at that time based on the results at that time, not today. Suppose if it happens in May or in April, you know, the results of the March will be the parameters. Based on that, the swap ratios will be there. It's clearly mentioned that it will be based on that valuation from E&P, a merchant bank's determination of the valuation. I mean, we are also in the same boat as the existing shareholders. It is nothing that, we are going to wait for, I mean, we have to wait for the actual valuations to be arrived at based on the fundamentals, which we have delivered at that time. All right, sir. Wish you all the best. Thank you. Thank you. Thank you. We have our next question from the line of Darshit Shah from Nirvana Capital. Please go ahead. Yes, I just one follow-up. I know, sir, we have been exploring this opportunity since long and we have been meeting lot of players. Mr. Shah, sorry, can you please de-handset, please? Sure. Yes, I just wanted to know that we have been exploring this option since long and we have met lot of people, including few of the pharma companies, big pharma companies, as well as strategic private equity investors. In that whole process, you think that this, according to you, was the best option, which we could get for a long-term value creation for shareholders? Yeah. I mean, you know, we at this point of time, you know, this has been evaluated based on a multiple rounds of discussions and, you know, we squared off with Advent given their various level of experience in the healthcare industry. We felt that this is the best choice at this point for us to grow. The future will be unveiling at the point of time when, you know, the further plans will be revealed by Advent. Today, we are talking from the point of view of Suven. You know, We cannot talk about Advent as an acquirer and then give their kind of options of what is the growth plan and all sort of things. That's why we are restricting ourselves to only focus on what we have done in Suven and then how we are evaluating this and then where the value addition or accretion which we are expecting to happen actually. Probably, you know, at a future call when Advent is going to be part of it, some of these you know, questions which may be resolved, and then there'll be in a position to answer. Sure. Thank you so much. All the best. Thank you. We have our next question from the line of V.P. Rajesh from Banyan Capital Advisors. Please go ahead. Yeah. Hi. Thanks. Just a suggestion, sir. If you can have Advent people on the next earnings call, I think it will be helpful for us to understand how they are thinking about the listed company and the merger with their private entity. That'll be really, really helpful. Yes, we'll certainly do that next time, when we have the investor call. We'll include them so that you will have much more clarity. Perfect. Thank you so much. It's going to be too much details at this time. Great. Great. That's all I have. Thank you. Thank you. We have our next question from the line of Amar Maurya from AlfAccurate PMS. Please go ahead. Sir, just like, you know, on the deal value perspective, I think everybody is concerned about that. Currently, if we see, I mean, altogether, what Advent has invested at different period of time for creating this whole Cohance platform was around INR 3,700 crore-INR 3,800 crore. Based on the FY 21 or 22 numbers, whatever is available from the NCA, if we do the same multiple, we get to something around INR 4,300 crore-INR 4,400 crore kind of a deal value, and which basically is the combined is 12x EV/EBITDA based on that. Are you saying that whenever the merger happens, this is the kind of a valuation will be, which will be evaluated for the Cohance platform to get merged with Suven? That's not the way you have to look at it. I mean, you are bringing some unlisted versus the listed and all that stuff. You have to wait until the actual things will come out. This is not the right time. We are only trying to sell its stake at this time, and it has to consummate. Only these activities happens. This will be done through a merchant banker, independent merchant banker. We are also as a, like any other shareholders, we are also the shareholders, and we'll be looking after the shareholders value also when the swap ratio is arrived at. Right now it's beyond me to give you all these kinds of answers. Next, next time when we meet, we'll have the Advent people also with in our this thing, so you'll have much more better clarity. You have to wait for the things to happen. You cannot leapfrog and guess, estimate everything today itself. The idea is to have independent bankers valuation based on the fundamentals at the time of merger application is filed and the swap ratio is determined. We are there along with other shareholders to protect ourselves. Okay. Perfect, sir. Thank you. Thank you. We have our next question from the line of Pankaj Gupta from Ratnabali Securities Private Limited. Please go ahead. Yeah. Yeah, good afternoon, sir. Sir, I will repeat what my earlier participants have said, that if you would be able to arrange a call with Advent International at the earliest. Also I would like to say, sir, say if an in-principle decision of the mergers have been taken by both Suven and Advent, and we know that Suven Pharma have a long history, and also Advent and its entities like Avra, ZCL and Cohance also have a presence for quite long. Maybe one year numbers of EBITDA or whatever you are saying shouldn't make so much of a difference. As an investors in your company, our fortune will be dependent upon the kind of merger ratios which would be chalked out. I again request that if you could arrange a call with Advent at the earliest, it would be helpful. We will pass this information to Advent team. Yeah. Thank you, sir. Thank you. Thanks. We have our next question from the line of C. Srihari from PCS Securities. Please go ahead. Mr. Srihari? Yeah, basically, thanks for the opportunity. I have two questions. Number one, what is the kind of technology that, you know, would be available to Suven by virtue of the acquisition? Secondly, a hypothetical question, if this platform had been available to you earlier, what is the kind of incremental growth you could have possibly had? Thank you. In the pharmaceuticals, technology is similar, but it's only the focus in which side of the spectrum you want to do the business. The value-added side or the pure generic side. That's all it is. That will determine. The technology is not the question here. It's the capabilities and capacities is the one that counts, and the focus in which direction you are moving. That's all it counts. What's the second question? The second one was hypothetical. Let's say, you know, all these inputs were available to you, what would Suven's, what could Suven's numbers have been? We are not gonna make a commentary on anything at this time. We are focusing until this acquisition takes place exclusively on Suven only. Only post that we can do that. The strategies and all other things which we can talk about it at the next conference call where we also will involve the Advent people. The ratios and the rationale and all that stuff. In addition to what we are bringing to the table, they are also can bring to the table. Global footprint they can bring to the table, so they can explain you much better. Let us not derive conclusions at this time. I think we would like to wait for the next opportunity. Right now we are telling the rationale, and that's where we are. Could you please tell us the capacity utilization of the various verticals? As I said earlier, we have not gone to that kind of detail. At this time, we are in the process of signing the share purchase agreement. Only when it comes to the next level we will go into all those details. No, sir. I meant to say what is the current capacity utilization? For where? I'm not talking about some other company at this time, sir. We've not started any activity there. I mean, for Suven as a standalone entity, what is the current capacity utilization? For the Suven, 100%. Oh, okay. Okay, fine. Thank you. Thank you. As there are no further questions, I now hand over the conference to the management for closing comments. Over to you, sir. Thank you everyone, for tuning into this event that happened today. In the Advent acquiring 50% of the stake and a significant majority stake in the pharmaceutical company with an intent to have a global footprint by making this third largest CDMO out of India, giving more offerings to the global pharmaceutical industry and making this a value additive both to the customers and to the shareholders. This will have many milestones to achieve. First it has to go through the CCI and the European approvals. Then the approval, I mean, the share purchase has to happen, then the open offer has to happen, then only the Advent will come into the picture. At that time they will data for the explore the possible merger aspects which is going to be synergistic in our processes. With this, I thank you each and everyone, and I hope to catch up with you during next time where we involve Advent people also, so we'll have much more clarity by that time. Thank you once again. Thank you. On behalf of Suven Pharmaceuticals Limited, that concludes the conference call. Thank you for joining us and you may now disconnect your lines.