Emcure Pharmaceuticals IPO Opens Today: GMP, Subscription Status, Review, and Application Details
Emcure Pharmaceuticals, a prominent player in the Indian pharmaceutical sector, has launched its Initial Public Offering (IPO) today. Backed by Bain Capital, this much-anticipated IPO has generated significant interest among investors. This article provides a comprehensive overview of the Emcure Pharmaceuticals IPO, including key dates, subscription status, Grey Market Premium (GMP), and other essential details to help you make an informed decision.
Introduction and IPO Details
The Emcure Pharma IPO is a book-built issue amounting to ₹1,952.03 crores. It consists of a fresh issue of 0.79 crore shares valued at ₹800 crores and an offer for sale of 1.14 crore shares valued at ₹1,152.03 crores.
- Subscription Period: July 3, 2024, to July 5, 2024
- Allotment Date: July 8, 2024
- Listing Date: July 10, 2024
- Price Band: ₹960 to ₹1,008 per share
- Minimum Lot Size: 14 shares
- Minimum Investment for Retail Investors: ₹14,112
- Minimum Investment for Small High Net Worth Individuals (sNII): 15 lots (210 shares) at ₹211,680
- Minimum Investment for Big High Net Worth Individuals (bNII): 71 lots (994 shares) at ₹10,01,952
The book-running lead managers for the Emcure Pharma IPO are Kotak Mahindra Capital Company Limited, Jefferies India Private Limited, Axis Capital Limited, and J.P. Morgan India Private Limited. The registrar for the issue is Link Intime India Private Ltd.
About the Company
Founded in 1981 by Mr. Satish Ramanlal Mehta, Emcure Pharmaceuticals Limited is one of India’s leading pharmaceutical companies. The company develops, manufactures, and markets a wide range of pharmaceutical products both domestically and internationally. Emcure has a presence in over 70 countries, with a diverse product portfolio that includes orals, injectables, and biotherapeutics.
Emcure is ranked 13th in domestic sales among Indian pharmaceutical companies for the MAT (Moving Annual Total) September 2023 and holds a 4th place market share in its covered markets. The company’s domestic sales accounted for 50.84% and 53.16% of its total revenue for the six months ending September 2023 and the financial year 2023, respectively. Emcure has demonstrated economic stability and a strong market presence in India, with domestic sales growing at a rate of 10.80% from September 2019 to September 2023.
As of September 30, 2023, Emcure employed 552 scientists and operated five research facilities in India. The company has filed over 1,800 documents, including 204 in the EU and 133 in Canada, and holds 201 granted patents, with 33 pending applications and 102 drug master files submitted. Emcure operates 13 manufacturing facilities in India, producing a variety of pharmaceutical and biopharmaceutical products. The company also maintains a robust marketing and distribution network, with over 5,000 field personnel and 5,000 stockists served by 37 carry-and-forward agents.
Objectives of the Emcure Pharma IPO
The net proceeds from the IPO are intended for the following purposes:
- Repayment and prepayment of certain outstanding borrowings: As of March 31, 2024, Emcure’s total outstanding borrowings were ₹2,09,194 lakhs on a consolidated basis.
- General corporate purposes, including:
- Supporting organic growth and growth through acquisitions
- Strengthening marketing and brand-building efforts
- Investing in subsidiary companies
- Addressing general corporate needs
- Any other purpose approved by the Board or a designated committee, compliant with applicable law
Financials of Emcure Pharma
Profit & Loss Account (₹ in crores)
| Particulars | FY24 | FY23 | FY22 |
|---|---|---|---|
| Revenue | 6,658.25 | 5,985.81 | 5,855.38 |
| EBITDA | 1,276.78 | 1,220.94 | 1,393.38 |
| PAT | 527.57 | 561.84 | 702.55 |
Balance Sheet (₹ in crores)
| Particulars | FY24 | FY23 | FY22 |
|---|---|---|---|
| Total Assets | 7,806.16 | 6,672.53 | 6,063.46 |
| Share Capital | 181.15 | 180.85 | 180.85 |
| Total Borrowings | 4,684.39 | 4,022.87 | 3,949.32 |
Cash Flow Statement (₹ in crores)
| Particulars | FY24 | FY23 | FY22 |
|---|---|---|---|
| Net cash from operating activities | 1,097.24 | 746.85 | 768.2 |
| Net cash from investing activities | -712.51 | -467.68 | -788.79 |
| Net cash from financing activities | -164.2 | -145.39 | -151.85 |
| Net increase in cash equivalents | 220.52 | 133.77 | -172.43 |
Emcure Pharma IPO GMP
As of July 2, 2024, the latest Grey Market Premium (GMP) for the Emcure Pharma IPO is ₹290. This indicates an estimated listing price of ₹1,298 per share, reflecting an expected gain of 28.77%.
Frequently Asked Questions (FAQs)
What are the strengths of Emcure Pharma IPO?
- Strong position in the domestic market
- Diversified international product portfolio
- Robust R&D capabilities
- Extensive manufacturing capacity
- Experienced management team and Board
What are the major risks associated with Emcure Pharma IPO?
- Declining Profit After Tax (PAT)
- High working capital requirements
- Stringent regulatory compliance in domestic and international markets
What are the minimum and maximum lot sizes in Emcure Pharma IPO?
- Retail (Min): 14 shares (₹14,112)
- B-HNI (Min): 994 shares (₹10,01,952)
What are the reservation categories for different investors?
- QIB: Not more than 50% of the Net Issue
- Retail: Not less than 35% of the Net Issue
- NII (HNI): Not more than 15% of the Net Issue
Analysts’ Recommendations
Brokerage firms have generally recommended a ‘subscribe’ rating for the Emcure Pharma IPO with a long-term investment horizon.
- Anand Rathi highlights Emcure’s strong focus on women’s healthcare and its market leadership in the gynecology therapeutic area. The firm views the IPO as fairly priced at a P/E of 36x based on FY24 earnings.
- Swastika emphasizes Emcure’s large and diversified product portfolio and strong R&D infrastructure. Despite recent profitability declines due to interest expenses and depreciation, Swastika recommends a long-term investment in the IPO.
- Reliance Securities cites improving life expectancy, rising chronic diseases, and growing awareness as factors supporting Emcure’s growth, recommending a ‘subscribe’ rating.
Conclusion
The Emcure Pharmaceuticals IPO offers investors a chance to invest in a leading pharmaceutical company with a strong market presence, both domestically and internationally. The company’s robust financials, extensive product portfolio, and experienced management make it an attractive option for long-term investment. However, potential investors should also consider the risks associated with regulatory compliance and high working capital requirements. As always, it is advisable to consult with financial advisors before making investment decisions.
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Disclaimer: Investing in the equity market involves risks. This article is for educational purposes only. The views expressed and data provided here are by Equitypandit’s team. Kindly do not completely depend on the information provided as risk appetites differ from individual to individual, and various market factors influence investment decisions.
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