The upcoming Emcure Pharmaceuticals IPO has grabbed headlines, with the Bain Capital-backed company preparing to open its subscription on July 3, 2024. Investors are keenly watching this development, as Emcure’s IPO is a mix of fresh issues and an offer for sale. The price band is set between ₹960 and ₹1,008 per equity share, with each share having a face value of ₹10. This pricing positions Emcure competitively among its peers in the pharmaceutical sector, drawing significant interest.
Emcure Pharmaceuticals is a notable player in the pharma industry, known for developing and manufacturing a wide range of pharmaceutical products. Their product lineup includes injectables, biotherapeutics, and oral medications, catering to over 70 countries with a strong presence in Europe, Canada, and India. The company’s robust market presence and diversified product portfolio make this IPO particularly attractive to potential investors.
Prominent shareholders, including Satish Ramanlal Mehta, Sunil Rajanikant Mehta, Namita Vikas Thapar, Samit Satish Mehta, and Bain Capital’s affiliate BC Investments IV Ltd, will be offloading stakes as part of the offer for sale. This move comes despite a slight dip in profit after tax, which decreased by 6.1% between March 2023 and March 2024. However, the company’s sales rose by 11.33% during the same period, showcasing its resilience and strong market demand.
The Emcure Pharmaceuticals IPO aims to raise ₹1,952.03 crore. This includes a fresh issue of ₹800 crore and an offer for sale worth ₹1,152.03 crore. The minimum lot size for investors is set at 14 shares, allowing bids in multiples of 14. The proceeds from the IPO will be primarily used for repaying or prepaying certain outstanding borrowings and for general corporate purposes. This strategic use of funds is expected to strengthen the company’s financial position and support its growth plans.
The allocation of shares in this IPO is structured with 50% reserved for qualified institutional buyers, 15% for non-institutional investors, and 35% for retail investors. Additionally, 108,900 equity shares are reserved for employees at a discounted rate of ₹90 per share. This inclusive approach aims to attract a diverse group of investors, enhancing the overall appeal of the IPO.
Key dates for the Emcure Pharmaceuticals IPO include the opening of subscriptions on July 3 and closing on July 5, with the allocation to anchor investors scheduled for July 2. The tentative allotment date for shares is July 8, followed by refunds on July 9. Shares are expected to be credited to demat accounts on the same day, and the listing on BSE and NSE is anticipated on July 10. This timeline offers a clear path for investors to follow, ensuring a smooth process from subscription to listing.
Lead managers for the IPO include Axis Capital Limited, J.P. Morgan India Private Limited, Jefferies India Private Limited, and Kotak Mahindra Capital Company Limited, with Link Intime India Private Ltd serving as the registrar. Their involvement provides a solid backing and instills confidence in the successful execution of the IPO.
Domestically, Emcure’s sales have been strong, contributing over 50% of its total revenue in recent fiscal periods. The company’s domestic sales grew at a compound annual growth rate of 10.80% from September 2019 to September 2023, outperforming the broader Indian pharmaceutical market. Emcure operates 13 manufacturing facilities across India, underscoring its extensive operational footprint and production capabilities.
In the grey market, Emcure Pharmaceuticals’ IPO has a premium of ₹264, indicating a potential listing price of around ₹1,271 per share. This represents a 26.19% increase over the upper end of the IPO price band, reflecting strong investor sentiment and demand.
With Namita Thapar partially offloading her stake, the Emcure Pharmaceuticals IPO is generating substantial buzz. The strong market fundamentals and strategic growth plans position Emcure as a compelling investment opportunity. As the subscription date approaches, all eyes are on how this major IPO will unfold and its subsequent impact on the market.
