The Bangalore-based Biocon India is splitting its operations into two strategic business units - biotechnology, and contract research. In the process it is converting three of its group companies - Helix Biotech, Biochemizyme India, and Biocon Quest - into fully-owned subsidiaries of Biocon India. Syngene International, another group company specialising in contract research, will continue to operate as a separate entity.

The move is aimed at listing Biocon and Syngene in India and eventually on the Nasdaq within the next 18-36 months. The proposed restructuring is aimed at improving market value. Kiran Mazumdar-Shaw, chairman and managing director of Biocon India, says that within the next one and a half to three years, the group will offer around 15-20 of Biocon India''s and Syngene''s equity to private investors.

Meanwhile the share swap arrangement is being worked out to enable all shares to be transferred to the flagship company, Biocon India. Post-transfer, 90 per cent of Biocon’s equity will be owned by Ms Muzumdar Shaw and her husband John Shaw, and the rest will be split between employees and shareholders.

Biocon India was started in 1978 to produce and market a range of food and non-food industrial enzymes, hydrocolloids and food ingredients. Quest International, a Dutch subsidiary of Unilever, then held 24 per cent in Biocon India.

Following the worldwide sales of Unilever''s speciality business in 1997 to ICI, the Biocon group acquired Quest International''s 50 per cent equity in both Biochemizyme India and Biocon Quest.

Biochemizyme India was floated in 1990 as a 100 per cent export-oriented unit for manufacture of speciality enzymes based on proprietary solid state fermentation technology. Biocon Quest India was created in 1996 as a 50:50 joint venture company between Biocon India and Quest International.

Syngene International was set up in 1994 as a contract research organisation, and Helix Biotech was started in 1998 for diversifying the group''s activities into pharmaceutical bulk actives.

The group plans to start another round of an employee stock option plan, says Ms Majumdar-Shaw. According to her, following the listing of Biocon India in India and Nasdaq, all the fully-owned subsidiaries will be eventually merged into Biocon India. Combined group sales are expected to touch Rs 85 crore by March 2000.