(L-R) – Mr. Akshay Sahai (Vice President, Healthcare Investment Banking, Jefferies India Private Limited); Mr. V. Jayasankar (Managing Director and Member Of The Board, Kotak Mahindra Capital Company Limited); Mr. Piyush Nahar (EVP, Corporate Development, Strategy & Finance, Emcure Pharmaceuticals Limited); Ms. Namita Thapar (Whole-time Director, Emcure Pharmaceuticals Limited); Mr. Satish Mehta (Managing Director and Chief Executive Officer, Emcure Pharmaceuticals Limited); Mr. Samit Mehta (Whole-time Director, Emcure Pharmaceuticals Limited); Mr. Vikas Thapar (President, Corporate Development, Strategy & Finance, Emcure Pharmaceuticals Limited); Mr. Tajuddin Shaikh (Chief Financial Officer, Emcure Pharmaceuticals Limited); Mr. Kuunal Mallkan (Vice President, Equity Capital Markets, Axis Capital Limited); Mr. Abhinav Bharti (Head of India Equity Capital Markets, J.P. Morgan India Private Limited) at the press conference in connection to Emcure Pharmaceuticals Limited’s Initial Public Offering.
Mr. Satish Mehta (Managing Director and Chief Executive Officer, Emcure Pharmaceuticals Limited) at the press conference in connection to Emcure Pharmaceuticals Limited’s Initial Public Offering.
Emcure Pharmaceuticals Limited
MUMBAI, 28 JUNE, 2024 (GPN): Maharashtra based Emcure Pharmaceuticals Limited today on Friday, 28 June announced the launch of its Initial Public Offer (IPO) on Wednesday, 3rd July 2024. The Pune-headquartered 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.
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.
The Equity Shares offered through the Red Herring Prospectus are proposed to be listed on both BSE Limited (“BSE“) and the National Stock Exchange of India Limited (“NSE”, together with BSE, the “Stock Exchanges”).
Kotak Mahindra Capital Company Limited, Axis Capital Limited, Jefferies India Private Limited, and J.P. Morgan India Private Limited are the Book Running Lead Managers to the Offer.
All capitalised terms referred to in this press release that have not been defined shall have the same meaning as prescribed in the RHP. ENDS/ GPN
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