IPO Synopsis
Emcure pharmaceuticals decided to join the IPO frenzy this year. It filed a DRHP with SEBI for an IPO worth between Rs.4500 crores to Rs.5000 crores. The initial public offering (IPO) will be conducted via fresh issuance of equity shares worth Rs. 1,100 crores and an offer of sale (OFS) of 18,168,356 shares by promoters and existing shareholders. As a part of the OFS, promoters Satish Mehta, holds 41.92% stake, will sell 20.30 lakh while Sunil Mehta, who holds 6.13% stake, will sell 2.5 lakh shares, and BC Investments IV Ltd, that hold 13.09%, will divest 99.5 lakh shares.
The company is also taking a pre-IPO placement into consideration aggregating up to Rs.200 crores. If the pre-IPO successfully goes through, the IPO size will reduce. Axis Capital, JM Financial, BOB Capital Markets, BofA Securities India Limited, Credit Suisse Securities (India) Private Limited have been appointed as merchant bankers to advise the company on the IPO. In July, Emcure Pharma included four new independent directors, including former Foreign Secretary Vijay Keshav Gokhale in its board. The others who have joined the company's board are Shailesh Ayyangar, Hitesh Jain and Vidya Yeravdekar. Berjis Desai has taken over as the chairman of Emcure Board.
Objective of the issue
1) Proceeds of the fresh issue will be used towards the payment of debt and for general corporate purposes.
About Emcure Pharmaceuticals Ltd
Emcure Pharmaceuticals is recognised as the 12th largest pharmaceutical company in India based on sales in gynaecology, blood related and HIV antivirals therapeutic areas. It holds 51.53% market share in HIV It is involved in developing, manufacturing and marketing of a broad range of pharmaceutical products across several major therapeutic areas across the globe. It has presence in around 70 markets around the world, with strong presence in Europe and Canada. The Pune-based company is involved in injectables and biologics and is currently developing an RNA vaccine for COVID-19 through its subsidiary Genova Biopharmaceuticals.
The firm is one of the market leaders in the country for HIV antivirals, gynaecology and blood-related therapeutic areas, and strongly holds a domestic market share of 51.53%, 11.85% and 10.26%, respectively in 2021.
The company’s sales in India CAGR of 11.28%, calculated for the time period between 2019 to 2021, significantly outperformed the sales CAGR of the Indian pharmaceutical industry’s overall growth in sales in India, which grew at 5.78%. While the sales outside India between FY19 and FY21 reported CAGR of 32.80% yet outperforming the Indian pharmaceutical industry’s overall growth in sales outside India, which grew at a CAGR of 14.90%.
The firm has 14 manufacturing facilities across India with approvals from various regulatory bodies including, among others, the USFDA, MHRA (United Kingdom), Health Canada and EDQM (Europe). The facilities are capable of producing pharmaceutical and biopharmaceutical products of a wide range of dosage forms.
Emcure Pharmaceuticals Ltd Financial Status
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Revenue from Operations |
6,056.42 |
5,048.55 |
4,717.18 |
|
EBITDA |
126.74 |
78.63 |
88.22 |
|
PAT |
418.59 |
100.61 |
202.97 |
|
EPS (basic in Rs.) |
21.68 |
4.62 |
10.47 |
|
RoNW |
17.25% |
4.37% |
10.35% |
|
RoCE |
22.64% |
11.67% |
14.85% |
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Total Assets |
6,807.40 |
6,004.06 |
5,810.40 |
|
Share Capital |
180.85 |
180.85 |
180.85 |
|
Total Borrowings |
2,332.87 |
2,182.15 |
2,139.87 |
|
Particulars (In Rs. Crores) |
FY21 |
FY20 |
FY19 |
|
Net cash inflow from operating activities |
704.44 |
500.30 |
482.63 |
|
Net Cash flow from investing activities |
-251.85 |
-163.76 |
-408.63 |
|
Net Cash flow from financing activities |
-188.90 |
-300.51 |
-773.47 |
|
Net increase/(decrease) in cash & cash equivalents |
263.68 |
36.03 |
-699.47 |
Peer Comparison
|
Name of Company |
Face Value (Rs. Per Share) |
Total Income for FY2021 (in Rs. crores) |
EPS (Basic) |
P/E |
NAV (Rs. per share) |
RONW (%) |
|
Emcure Pharmaceuticals Limited |
10 |
6,091.81 |
21.68 |
NA |
125.68 |
17.25% |
|
Abbott India Limited |
10 |
4,390.92 |
325.04 |
53.79 |
1224.59 |
26.54 |
|
Alkem Laboratories Limited |
2 |
9,098.22 |
132.57 |
25.28 |
616.96 |
21.49 |
|
Biocon Limited |
5 |
7,360.30 |
6.24 |
66.12 |
63.59 |
9.71 |
|
Cipla Limited |
2 |
19,425.58 |
29.82 |
32.8 |
227.25 |
13.12 |
|
Dr. Reddy's Laboratories Limited |
5 |
19,338.90 |
117.67 |
46.08 |
1060.83 |
11.06 |
|
Torrent Pharmaceuticals Limited |
5 |
8,061.48 |
73.89 |
40.43 |
344.94 |
21.45 |
Key Point of Emcure Pharmaceuticals IPO -
IPO Key Points
-
Strengths
1) Well-placed to leverage leading position in the domestic market.
2) Large, Diversified and Fast-Growing Product Portfolio in International Markets.
3) The differentiated platforms and capabilities helps the firm to create de-risked differentiated product portfolios that it markets and sell domestically and internationally.
4) The 14 manufacturing facilities across India and intend to further expand the capabilities and capacities. -
Risks
1) Emcure Pharmaceuticals is subjected to comply with the regulations and quality standards stipulated by various regulators, failing to do so may affect the business operations and reputation.
2) Any delay, interruption or reduction in the supply or transportation and cost increase of raw materials, finished products may impact the pricing and disrupt supply of the products and operations.
3) There are outstanding legal proceedings involving the company, promoters, subsidiaries, directors and group companies.
4) The company may face pricing pressure from customers may affect which in turn would affect the margins and profitability.
5) The company is exposed to counterparty risk and may face delay in receiving payments or non-receipt of payments.
How to apply for IPO?
-
Login to your 5paisa account and select the issue in the
current IPO section -
Enter the number of lots and price at which you wish to
apply for -
Enter your UPI ID and click on submit. With this, your
bid will be placed with the exchange -
You will receive a mandate notification to block funds in
your UPI app -
Approve the mandate request on your UPI and funds
will be blocked
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IPO FAQs
What is the minimum lot size and investment required for the Emcure Pharmaceuticals IPO?
Emcure Pharmaceuticals IPO details are yet to be announced.
What is the price band of the IPO?
Emcure Pharmaceuticals IPO details are yet to be announced.
When does the Emcure Pharmaceuticals issue open and close?
Emcure Pharmaceuticals IPO details are yet to be announced.
What is the size of Emcure Pharmaceuticals IPO issue?
The IPO issue size is worth Rs.4500 to 5000 crores.
Who are the promoters/key personnels of Emcure Pharmaceuticals?
Satish Mehta and Sunil Mehta
What is the allotment date of Emcure Pharmaceuticals?
Emcure Pharmaceuticals IPO details are yet to be announced.
What is the Emcure Pharmaceuticals listing date?
Emcure Pharmaceuticals IPO details are yet to be announced.
Who are the book runners for Emcure Pharmaceuticals IPO?
Axis Capital, JM Financial, BOB Capital Markets, BofA Securities India Limited, Credit Suisse Securities (India) Private Limited are the book running lead managers to the issue.
What is the objective of the issue?
Proceeds of the fresh issue will be used towards the payment of debt and for general corporate purposes.
How to apply for the Emcure Pharmaceuticals IPO?
To apply for the IPO, follow the steps given below
1) Login to your 5paisa account and select the issue in the current IPO section.
2) Enter the number of lots and price at which you wish to apply for.
3) Enter your UPI ID and click on submit. With this, your bid will be placed with the exchange.
4) You will receive a mandate notification to block funds in your UPI app.
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