Emcure Pharmaceuticals Limited, a prominent player in the pharmaceutical industry, is set to make headlines with its upcoming Initial Public Offering (IPO). The Emcure Pharma IPO will open for subscription on July 3, 2024, and promises to be a significant event for investors and stakeholders. Moreover, This article delves into the essential details of the IPO, including the company’s background, financial performance, and the specifics of the offering.
Company Background
Founded in 1981 by Satish Ramanlal Mehta, Emcure Pharmaceuticals Limited has grown to become a leading pharmaceutical company in India. The company develops, manufactures, and markets a wide range of pharmaceutical products, including pills, liquids, injectables, and complex ingredients such as chiral molecules, iron molecules, and cytotoxic substances. With a presence in 70 countries and 13 manufacturing facilities in India, Emcure has established itself as a global player in the pharmaceutical industry.
Promoters and Their Stakes
The promoters of Emcure Pharma include Satish Ramanlal Mehta, Sunil Rajanikant Mehta, Namita Vikas Thapar, and Samit Satish Mehta. Before the IPO, the promoters jointly hold 54.42% stake, or 98,591,192 shares, in the company. The promoter group also includes Everest Trust, Unity Trust, Bhavana Satish Mehta, and Pushpa Rajnikant Mehta, among others, who collectively hold 28.79% stake in the company.
Satish Ramanlal Mehta, the Managing Director of Emcure Pharmaceuticals, holds the maximum stake among the promoters with 41.85% (75,816,748 shares). He will sell up to 4.2 lakh equity shares via the Offer for Sale (OFS) component of the IPO. Mehta, an alumnus of the Indian Institute of Management, Ahmedabad (IIM-A), started Emcure Pharma and has significantly contributed to its growth and success.
Samit Satish Mehta, the Executive Director, Operations, and Chief Operating Officer, holds a 7.48% stake (13,547,632 shares) and will sell 10,000 shares through the OFS. An alumnus of the Wharton School, University of Pennsylvania, Samit has played a crucial role in expanding Emcure’s business in the United States, European Union, and Canada.
Namita Vikas Thapar, the Executive Director, holds a 3.5% stake (6,339,800 shares) and will offload up to 12.68 lakh shares in the IPO. Thapar, known for her appearance on Shark Tank India, joined Emcure as Chief Financial Officer in 1999. She holds a management degree from the Fuqua School of Business, Durham, and is also a Chartered Accountant.
Sunil Rajanikant Mehta, the Whole-time Director, holds a 1.59% stake (2,887,012 shares) and will sell 40,000 shares via the OFS. Mehta joined the company in 1983 and became a Board member in 2013. Furthermore, He has been instrumental in setting up Emcure’s manufacturing facilities and is an alumnus of the Institute of Management Development and Research, Pune.
IPO Details
The Emcure Pharma IPO aims to raise ₹1,952.03 crore through a combination of a fresh issue of 79 lakh shares, amounting to ₹800 crore, and an offer for sale of 1.14 crore shares, worth ₹1,152.03 crore. The price band for the IPO is set at ₹960 to ₹1008 per share, with a lot size of 14 shares. Eventually, Retail investors can bid for a minimum of one lot, which amounts to an investment of ₹14,112.
The IPO will open for subscription on July 3, 2024, and close on July 5, 2024. The allotment of shares is expected to be finalized on July 8, 2024, with the listing on BSE and NSE scheduled for July 10, 2024. Moreover, Kotak Mahindra Capital Company Limited, Axis Capital Limited, J.P. Morgan India Private Limited, and Jefferies India Private Limited are the book-running lead managers for the issue, while Link Intime India Private Ltd is the registrar.
Financial Performance
For the financial year ended March 31, 2024, Emcure’s revenue from operations increased by over 11% to ₹6,658 crore, compared to ₹5,985 crore in the previous fiscal year (FY23). However, the company’s profit after tax (PAT) declined by over 6% to ₹527.58 crore in FY24 from ₹561.85 crore in FY23. Despite the drop in PAT, the company’s net worth surged by 18% to ₹2,952.28 crore in FY24 against ₹2,501.13 crore in FY23.
Use of Proceeds
The net proceeds from the fresh issue of shares will be utilize towards the repayment and prepayment of certain outstanding borrowings and for general corporate purposes. Moreover, The reduction in debt is expect to improve the company’s bottom line and strengthen its financial position.
Key Highlights
- Promoter Participation: The promoters of Emcure Pharma will participate in the OFS, offloading some of their stakes, which reflects their confidence in the company’s future growth prospects.
- Strong Market Presence: Emcure Pharmaceuticals is ranked 13th in domestic sales among pharmaceutical companies in India and holds a leading position in the gynaecology and HIV antiviral therapeutic areas.
- Global Reach: With a presence in 70 countries and significant business in the United States, European Union, and Canada, Emcure has established itself as a global player in the pharmaceutical industry.
- Research and Development: Emcure employs 552 scientists across five research facilities in India and has filed over 1,800 documents globally, including 204 in the EU and 133 in Canada. The company holds 201 granted patents and has 33 pending patent applications.
- Manufacturing Capabilities: Emcure operates 13 manufacturing facilities in India, capable of producing a wide range of pharmaceutical and biopharmaceutical products.
Conclusion
In conclusion, The Emcure Pharma IPO presents an exciting opportunity for investors to participate in the growth story of a leading pharmaceutical company. With a robust product portfolio, significant global presence, and a strong focus on research and development, Emcure Pharmaceuticals is well-position for future growth. The IPO proceeds will help reduce the company’s debt, thereby improving its financial health and enabling further expansion. Retail investors and other stakeholders keen on the pharmaceutical sector should consider the Emcure Pharma IPO as a potential investment opportunity.
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