Delhi HC: Allchem Gave No B2C Undertaking; IPO Proceeding, Not Stayed

The Delhi High Court on Wednesday clarified that Allchem Lifescience Ltd. had not given any undertaking in April that it would refrain from entering the business-to-consumer model, as alleged by Alkem Laboratories Ltd. The clarification came after Allchem told the court that Alkem misrepresented the court’s earlier order to the Securities and Exchange Board of India.

Hearing Alkem’s permanent injunction plea against Allchem over the use of a similar trademark, the court noted that while mediation is ongoing, no order had been passed to stay Allchem’s initial public offering, and the interim injunction plea by Alkem is still pending.

The court said Alkem may approach it again if Allchem enters the pharmaceutical products space. For now, Justice Amit Bansal reiterated that Allchem must clearly state in all IPO-related communications that it has no connection with Alkem. The matter was earlier referred to mediation, with advocate Sudhanshu Batra appointed mediator.

Allchem had filed a draft red herring prospectus in March for an IPO comprising a fresh issue of up to ₹1.9 billion and an offer for sale of 7.16 million shares. Alkem had argued that the IPO could cause brand confusion and financial loss, but Allchem maintained that it only supplies raw materials for active pharmaceutical ingredients and is not in the pharma business directly