Macleods files DRHP for Rs.5,000 crore IPO

More than 16 months after the last big IPO of Gland Pharma, another mega pharma IPO is all set to tap the Indian capital markets. Mumbai based Macleods Pharma is slated to tap the capital market with an IPO of Rs.5,000 crore which will be entirely an offer for sale by the promoters and early investors in the company. Incidentally, Macleods Pharma is the seventh largest pharma company in India by top line sales and one of the most profitable.

The promoters will be selling a total of 6.048 crore shares via the offer for sale route. Currently, the entire equity of the company is held by the promoters. Due to this being an OFS, there will be no fresh funds coming into the company and the purpose is to only give an exit to the early investors and promoters.

This will also enable the listing of the company which provides a basis for stock valuation and the use of stock as currency in future.

Just to give a background, Macleods Pharma is a vertically integrated pharma company. The company develops, manufactures and markets a wide range of formulations across a host of therapeutic areas.

These include anti-infectives, cardiovascular, anti-diabetic, dermatology, and hormone treatment products. The company has not done any external equity fund raising till date and the entire growth of the company till date has been organically driven.

In terms of the size of the company in the Indian pharma industry, Macleods Pharma  ranks seventh by sales and it is predominantly driven by domestic sales in the Indian market. Just to give an example, the domestic business of Macleods Pharma comprises largely of branded generics accounting for 51.73% of total revenues.

Interestingly, non-metro centres represent more than 80% of the total domestic sales of Macleods Pharma as of FY-2021. 

In terms of global presence, Macleods Pharma has a strong presence across developed markets as well as emerging markets. Some of its major markets include North America, Europe, Africa, Asia, South America, and the CIS.

Global revenues from operations outside India grew at a CAGR of 21.5% over the last 3 years. For FY21, the EBITDA margins of the company stood at a healthy 29.12%, among the best in league in the pharma industry. 

Macleods Pharma was established in the year 1989 and has been an organically driven company ever since. For the fiscal year FY21, Macleods Pharma reported total revenues of Rs.7,750 crore and net profits of Rs.2,023 crore implying net profit margins of 26%. The issue of Macleods Pharma will be lead managed by Kotak Mahindra Capital, Citigroup, Edelweiss Financial Services Ltd, ICICI Securities and Nomura Financial Advisory.

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