Emcure Pharma IPO Review

Emcure Pharma is an Indian pharmaceutical company developing, manufacturing, and marketing worldwide a diverse range of pharmaceutical products across several therapeutic areas. Emcure Pharma IPO aims to garner Rs 1,952.03 crores. The issue is a combination of fresh issue of 0.79 crore shares aggregating to Rs 800.00 crores and OFS of 1.14 crore shares aggregating to Rs 1,152.03 crores..

IPO opensJuly 03, 2024
IPO ClosesJuly 05 2024
IPO Size (Rs.)₹1,952.03 Cr
IPO Size (shares)19,365,346 shares
BreakupFresh issue only
Face Value:₹ 10
IPO Price in Rs :₹960 to ₹1008 per share
Minimum Lot14 Shares
Listing AtNSE , BSE (mainboard)
QIB ~50 %
NII Quota~15%
Retail Quota~35%
 Lead ManagerKotak Mahindra Capital  Axis Capital , J.P. Morgan India and Jefferies India
Registrar Link Intime

Nephro Care India IPO: Short Notes

  • Incorporated in 1981, Emcure Pharma is an Indian pharmaceutical company developing, manufacturing, and marketing worldwide a diverse range of pharmaceutical products across several therapeutic areas.
  • Emcure Pharma is the 13th largest Pharmaceutical company in terms of domestic sales and has 13 manufacturing facilities in India.
  • As of September 30, 2023, the company’s marketing and distribution network in India was supported by over 5,000 field personnel who regularly interacted with healthcare providers. The distribution network included over 5,000 stockists, served by 37 carry-and-forward agents.
  • Emcure Pharmaceuticals has 13 manufacturing facilities in India.
  • Emcure Pharma employed 552 scientists and operated five research facilities in India. They filed over 1,800 documents globally, including 204 in the EU and 133 in Canada. The company has 201 granted patents, 33 pending patent applications, and submitted 102 drug master files.
  • Anchor Book: Goos response to Anchor book. Company raised Rs 582 crore from 48 anchor investors.
  • Domestic Pharma mix of the company comprised 24% gynecology, 16% cardiovascular, 11% anti-infectives, 9% vitamins minerals nutrients, 7% HIV antivirals. As of MAT September 2023, Emcure Pharmaceuticals held the 13th rank in domestic sales among pharmaceutical companies in India and commands the 4th position in market share within its covered markets.
  • The anchor book got good response from 48 investors. This includes some marquee investors Like HDFC MF, ICICI Pru MF, SBI MF, Abu Dhabi Investment Authority,  Goldman Sachs Asset Management, Nomura, HDFC Life, ICICI Pru Life, SBI Life, Birla MF, Kotak MF, Nippon MF, Mirae MF, and IIFL WhiteOak Etc.
  • The Offer For Sale is mainly by PE investor Bain Capital whose 13% stake will to drop to 9% and by the promoters whose 83% stake will reduce to 78%.
  • Based on annualized FY24 earnings Emcure Pharma IPO is being offered at P/E of 36.13. Based on FY23 earnings, the P/E is 33.93.
  • In FY24, Emcure Pharmaceuticals Limited reported revenue growth of 11% , amounting to Rs 6,715 crore vis-a-vis Rs 6,031 crore in FY23. The period saw a dip in PAT declined by 6.1 per cent.
  • Six of their brands were ranked among the 300 highest selling brands in the IPM for Mat FY 2024. Further 26 brands had domestic sales of over Rs 50 crore for Mat FY2024.
  • Their performance last year impacted by sluggish show in domestic market which contributed about half to their kitty, while exports grew in this period. Net margins were impacted due to higher operational and interest expenses.
  • Company has added more marketing representatives and field force, with the objective to increase domestic business.
  • For the net IPO proceeds Rs.. 800 cr, major chunk will go towards debt repayment. At present there is 1555 cr net debt
  • The company has paid dividends regularly. .
  • Compared to listed peers like Dr. Reddy‘s Laboratories t, Cipla at TTM P/E of 28, Alkem Laboratories PE valuations are not cheap and profit margin are comparable or lower.
  • I intend to apply in Emcure Pharma IPO. They are the largest domestic company in the important therapeutic areas of gynaecology and antivirals and have equal presence in export markets. Though not cheaply [priced compared to peers, it could attract some attention due to its strong capabilities and a successful record of building brands.
  • Due to current market conditions high subscription is expected.
  • GMP as reported on social media has been Rs.325.
  • This post is exploratory and educational purposes only. Please do your own diligence before investing in SME IPOs like this.
  • Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.

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