Emcure Pharmaceuticals Limited Rs. 1,952 Cr IPO Opens on Wednesday 3rd July, Price Band Set at Rs 960-1008 Per Share

MUMBAI, 28 JUNE, 2024 (TGN): Pune-headquartered Pharma Conglomerate Emcure Pharmaceuticals Limited today on Friday, 28 June announced the launch of its Initial Public Offer (IPO) on Wednesday, 3rd July 2024. The pharmaceuticals company fixed the price band at Rs 960-1008 Per Equity Share. New shares worth Rs 800 crore will be issued in the company’s IPO. Apart from this, 1,36,78,839 equity shares will be sold by existing shareholders including promoters under the Offer for Sale (OFS).

At the same time, about 1.4 crore shares will be put up for sale by its promoters and existing shareholders. The company said that the last date for bidding for the IPO will be July 5. At the same time, this issue for anchor investors will open a day earlier on June 2.

The promoters of the company who are selling shares in the IPO include Satish Ramanlal Mehta, Sunil Rajnikant Mehta, Namita Vikas Thapar and Samit Satish Mehta. Namita Vikas Thapar is also a judge of the popular business reality show ‘Short-Take India’. She has recently gained a lot of fame due to this reality show. Apart from these, Pushpa Rajnikant Mehta, Bhavana Satish Mehta, Kamini Sunil Mehta, BC Investments IV, Arunkumar Purushottamlal Khanna, Barjis Meenu Desai and Sonali Sanjay Mehta will also sell their shares in the offer-for-sale.

Emcure Pharma said that it has reserved 1,08,900 equity shares in the IPO for its employees. These shares will be given to them at some discount from the final issue price.

“At the time we were planning to come up with the IPO, the Ukraine-Russia escalation happened, and we felt that we will wait for an opportune time,” Satish Mehta, CEO and MD of Emcure Pharmaceuticals, told ‘TGN’ on Friday.
“We have a poll position in women’s health, and at the same time, there is a lot to be done in this space as there are gaps in the existing market. We can go into Tier-II and Tier-3 cities, and focus on reach and penetration. There are around 25,000 gynaecologists and around 35-40 percent have been covered in our universe,” said Mehta.
“My daughter Namitha Thapar (who is an executive director of Emcure) is extremely passionate about the women’s health segment and we intend to do a lot of work in that area. We have a reasonably good position in the IVF segment. As women’s health is a neglected area, the more the country keeps spending on healthcare at large; women’s health will receive more attention,” said Mehta, referring to in vitro fertilization.
Emcure would be open to inorganic opportunities after the listing, he said. It acquired Canada’s International Pharmaceutical Generics and its marketing arm Marcan Pharmaceuticals in 2016, and Tillomed in the United Kingdom in 2014.
In the domestic market, where it has grown organically, it would focus on women’s health and chronic therapy areas. In March, Emcure made a deal to exclusively distribute and promote Sanofi India’s cardiovascular brands Cardace, Clexane, Targocid, Lasix, and Lasilactone.

The company said that it has reserved half of the IPO i.e. 50 percent for qualified institutional buyers (QIB). At the same time, 35 percent has been reserved for retail investors. While 15 percent has been reserved for non-institutional investors (NII).

Emcure Pharma has a strong presence in India, Europe and Canada. The company said it will use Rs 600 crore of the money raised through the IPO to repay the debt. It has a debt of Rs 2,091.9 crore on its balance sheet as of the end of March 2024. The remaining amount will be used for general corporate purposes.

Emcure generated around 48.28 per cent of its business from India in FY24. It has presence in most therapeutic areas in India. These include gynecology, cardiology, vitamins, minerals, nutrients, HIV antivirals, hematology and oncology/anti-neoplastic etc.

The rationale behind the pricing of this IPO is multifaceted. Primarily, it aims to balance the interests of the company with those of potential investors, ensuring a fair valuation that aligns with market expectations. The capital raised through this IPO will be instrumental in funding the company’s expansion plans, including research and development initiatives, scaling up manufacturing capabilities, and exploring new market opportunities. This financial injection is anticipated to bolster Emcure Pharma’s competitive edge within the pharmaceutical industry.

Emcure Pharmaceuticals’ impending IPO, spearheaded by Namita Thapar, aims to strategically position the company for sustained growth and market leadership. The primary objectives of this fundraising initiative are multifaceted, encompassing several key areas that are pivotal to the company’s long-term vision. The funds generated through this IPO will primarily be allocated towards enhancing the company’s research and development (R&D) capabilities. Investment in R&D is crucial for fostering innovation and developing new pharmaceutical products that can address unmet medical needs. By bolstering their R&D infrastructure, Emcure Pharmaceuticals aims to accelerate the development of its drug pipeline, thereby ensuring a steady flow of new products to market.

Another significant portion of the proceeds will be directed towards the expansion of Emcure’s manufacturing facilities. This expansion is intended to increase production capacity and improve operational efficiencies. By upgrading and expanding its manufacturing capabilities, Emcure aims to meet the growing demand for its products both domestically and internationally. This strategic move is anticipated to enhance the company’s competitive edge in the global pharmaceutical industry.

Additionally, a portion of the funds will be utilized for debt repayment. Reducing the company’s debt burden will improve its financial health and provide greater flexibility for future investments and strategic initiatives. Lowering debt levels is also likely to enhance investor confidence and improve the company’s credit rating, which can lead to more favorable financing terms in the future.

Lastly, a part of the proceeds will be allocated for other corporate purposes, including potential acquisitions and partnerships that can complement and enhance Emcure’s existing business operations. These investments are expected to drive future growth by expanding the company’s product portfolio and market presence.

The company’s net profit declined by 6 percent to Rs 527.6 crore in FY 2024. At the same time, its revenue grew by 11.2 percent to Rs 6,658.3 crore, while operating profit (EBITDA) grew by 4.1 percent to Rs 1,229.7 crore. The company’s operating profit margin declined by 1.20 percent to 18.5 percent during this period.

Kotak Mahindra Capital Company, Axis Capital, Jefferies India and JP Morgan India are the book running lead managers of this public issue.Ends (TGN)

Leave a Reply

Your email address will not be published. Required fields are marked *