Indegene IPO Review

Indegene Limited specializes in delivering digital solutions tailored for the life sciences sector with comprehensive services which span various critical areas including drug development, clinical trials facilitation, regulatory submissions, pharmacovigilance, complaints management, sales and marketing support. Indegene IPO aims to raise 1,841.76 crores. The issue is a combination of fresh issue of 1.68 crore shares aggregating to Rs 760.00 crores and offer for sale of 2.39 crore shares aggregating to Rs 1,081.76 crores

IPO opensMay 06, 2024
IPO ClosesMay 8, 2024
IPO Size (Rs.)1,841.76 Cr (40,746,891 shares)
Breakupfresh issue ₹760.00 Cr + OFS ₹₹1,081.76 Cr
Face Value:₹ 2
IPO Price in Rs :₹430 to ₹452 per share
Minimum Lot33 Shares
Listing AtNSE, BSE
QIB~50%
NII Quota~15%
Retail Quota~35%
 Lead ManagerKotak Mahindra Capital, Citigroup Global Markets, J.P. Morgan India , Nomura Financial Advisory
Registrar Link Intime India Private Ltd 

About Indegene Limited:

  • Incorporated on October 16, 1998, Indegene is a provider of digital-led commercialization services for the life sciences industry, including biopharmaceutical, emerging biotech and medical devices companies and the sales and marketing of their products.
  • Their solutions enable life sciences companies to develop products, launch them in the market, and drive sales through their life cycle in a more efficient manner.
  • The company’s services can be divided into: (1) Enterprise Commercial Solutions, (2) Omnichannel Activation, (3) Enterprise Medical Solutions and (4) Enterprise Clinical Solutions and Consultancy Services.
  • Company’s Enterprise Commercial Solutions and Omnichannel Activation solutions cater to the commercial functions of life sciences companies.
  • Enterprise Medical Solutions and Enterprise Clinical Solutions cater to their medical and R&D functions. Enterprise Commercial Solutions primarily involve assisting life sciences companies with their digital marketing operations.
  • The company also provides digital asset management, marketing automation, customer data management and analytics solutions to measure the effectiveness of marketing campaigns.
  • Omnichannel Activation solutions help life sciences companies leverage a “digital first” approach for optimizing the last-mile promotion of biopharmaceutical products and medical devices to healthcare professionals HCPs across multiple channels.
  • Under the Enterprise Medical Solutions, Company establishes Centres of Excellence (“CoEs”) to consolidate large scale regulatory and medical operations for their clients.
  • Indegene also offers Enterprise Clinical Solutions and consultancy services. Their Enterprise Clinical Solutions help drive efficiencies in the drug discovery and clinical trial operations of life sciences companies.
  • The company, being a professionally managed company, does not have an identified promoter group.
  • At present, Nadathur Fareast Pte Ltd is the biggest shareholder in Indegene with a 23.64% stake. CA Dawn Investments has a 20.42% stake, and Brighton Park Capital owns a 12% stake in the company.

Financials: Indegene Limited

Particulars/ Rs (in crore)2023(09)2022(09)2023(12)2022(12)2021(12)
Revenue from Operations1,916.611,673.892,306.131,664.61966.27
Revenue Growth (%)14.50%38.54%72.27%
Adj. EBITDA as stated419.85343.54454.19312.81261.18
Adj. EBITDA Margin (%)21.91%20.52%19.69%18.79%27.03%
Net Profit241.9217.28266.1162.82185.68
Net Profit (%)12.62%12.98%11.54%9.78%19.22%
Share Capital44.3544.2544.30.350.31
Reserves1,282.65967.241,019.43763.55324.2
Net Worth1,327.001,011.491,063.72763.9333.09
EPS – Diluted (₹)10.849.7911.977.467.01
RONW (%)18.23%21.48%25.02%21.57%46.04%
NAV (₹)59.8645.7548.134.816.42
Post issue Share Capital47.85    
FV2.0    
IPO price452.0    
EPS Fy2311.1    
PE Fy2340.6    
EPS Fy24 (annualized)13.5    
PE Fy24  (annualized)33.5    
Market cap in Lacs10,814.1    
Market cap / Sales4.69    

Indegene IPO: Anchors

  • Indegene raises Rs 548.77 cr. from 36 anchor investors.
  • The anchor book saw participation from a wide variety of marquee investors, including Capital Group, one of the world’s largest investment management firms, Fidelity Investments, Loomis Sayles & Company, Jupiter Asset Management, Abu Dhabi Investment Authority, SBI Mutual Fund, ICICI Prudential Mutual Fund, Nippon India Mutual Fund, DSP Mutual Fund, Premji Invest, Custody Bank of Japan, WhiteOak Capital Management, UTI Mutual Fund, Bandhan Mutual Fund, Invesco Mutual Fund, Edelweiss Mutual Fund, Baroda BNP Paribas Mutual Fund, Aditya Birla Sun Life Insurance Company Limited, Bajaj Allianz Life Insurance Company Limited, Bharti AXA Life Insurance Company Limited, East Bridge Capital Master Fund Limited, Kotak Funds and Copthall Mauritius Investment Limited.

Indegene IPO: Salient Points

  • The OFS will enable current investors CA Dawn Investments (a Carlyle group compnay), Vida Trustees, Brighton Park Capital’s entities, and individual shareholders Manish Gupta, Rajesh Bhaskaran Nair, and Anita Nair to sell their stakes.
  • Life sciences operations expenditure, estimated at Rs 12 trillion (US$ 156 billion) in 2022 and expected to grow at a CAGR of 6.5% to reach Rs 15.5 trillion (US$ 201 billion) in 2026.
  • Domain expertise in healthcare.
  • Track record of creating value through acquisitions.
  • Since their inception, Indegene has completed a total of 13 acquisitions, and enjoyed synergistic benefits from each of these acquisitions.
  • In March, 2024, Indegene, announced the acquisition of Trilogy Writing & Consulting GmbH (Trilogy), a global provider of specialty medical writing capabilities across clinical, regulatory, safety and medical content to life sciences companies. The acquisition by Indegene Ireland, a subsidiary of Indegene Limited, augments Indegene’s depth of clinical and regulatory writing expertise for market authorization applications globally.
  • The proceeds from IPO are to be utilized for the repayment and prepayment of indebtedness of one of its principal subsidiaries, ILSL Holdings Inc, and for meeting capital expenditure requirements of Indegene Inc, a key subsidiary of the company. Additionally, the funds will also be used towards general corporate purposes and inorganic growth.
  • Revenues by Geographies:
 Revenue from operationsFor the nine months ended December 31, (₹ in million,)
20232022
North America12,737.9766.46%11,357.7467.85%
Europe5,762.7830.07%4,635.3527.69%
India155.310.81%274.151.64%
Rest of the world510.052.66%471.612.82%
Total revenue from operations19,166.11100.00%16,738.85100.00%
  • Indigene has carved a niche for itself by being in the forefront of providing comprehensive solutions that support biopharmaceutical companies, emerging biotech firms, and medical device manufacturers right through the stages of product development, market launch, and lifecycle management.
  • The company’s revenue from operations surged 37.% yoy to Rs 407.30 crore for FY23, net profit went up 29% to Rs 46 crore .
  • Revenue from operations increased to ₹23,061.33 million for the Financial Year 2023 from ₹16,646.09 million for the Financial Year 2022 and ₹9,662.74 million for the Financial Year 2021, representing a CAGR of 54.49%.
  • Track record of establishing long-standing client relationships; Indegene has established client relationships with each of the 20 largest biopharmaceutical companies in the world and earns more than 69% of their total revenue from these customers.
  • Further company has reported very high retention rates (revenue from existing customers as a % of revenue from such clients earned in previous year). The retention rate was 122.83%, 159.89%, and 129.90% in FYs 2023, 2022 and 2021.
  • As of December 31, 2023, Indegene had 65 active clients whom they deliver solutions from their operation hubs located across North America, Europe, and Asia.
  • It appears that with its strong domain expertise, and global delivery model, company can sustain its growth momentum.
  • Indegene IPO is coming at a PE of 40.6x (Fy23 earnings) and 33.5 x ( FY24 annualized earnings).
  • I am likely to apply for Indegene IPO. The company has over two decades of healthcare domain expertise and company is well positioned to benefit from the growth in life sciences operations expenditure. Further it has an impeccable track record of creating value through acquisitions.
  • GMP as reported on social media has been Rs. 255.
  • Please take a decision based on your risk appetite.
  • 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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