Medicamen Organics Limited develops, manufactures, and distributes pharmaceutical dosages including generic dosages in the form of tablets, capsules, oral liquids, ointments, gels, syrups, suspensions and dry powders for the Government and private entities as a contract manufacturer/third party manufacturer. Medicamen Organics IPO is a book built issue of Rs 10.54 crores. The issue is entirely a fresh issue of 31 lakh shares.

About Medicamen Organics Limited:

• They are engaged in developing, manufacturing and distribution of broad range of pharmaceutical dosage including generic dosage in form of Tablets, Capsules, Oral Liquids, Ointments, Gel, Syrups, Suspension and Dry powders for government (including both state and central governments) and private institutions as contract manufacturer / third party manufacturer.
• They market the product to private pharma companies in domestic as well as international markets through third party distributors or on loan license basis.
• The Promoters of Company are Mr. Bal Kishan Gupta and Mr. Ashutosh Gupta.
• They have a track record of operating B2B model which covers contract manufacturing model. The products are marketed across India as well as African, Commonwealth of Independent States (CIS) region and south East Asian Countries like Congo, Benin, Cameg, Togo, Senegal, Burkina Faso, Philippines, Myanmar, Mozambique, Togo, Burundi, Kyrgyzstan and Kenya by third-party distributor.

Financials: Medicamen Organics Limited

Anchors: Medicamen Organics IPO

Medicamen Organics IPO: Salient Points

• They have 2 WHO GMP approved manufacturing facilities located at Haridwar.
• From the net proceeds of Rs.13.69Cr
  • Rs.2.25Cr for capital expenses
  • Rs.3Cr are for Product Registration in Foreign Countries\
  • Rs.4Cr meant towards working capital
  • rest for General & Listing Expenses

• Break up of revenue

• Peers:

• As on March 31, 2024 they have entered into contract manufacturing with 44 domestic partners and 12 merchant exporters.
• Company is also strategically focusing on establishing a direct presence in international market for an instance in fiscal 2023 and 2024, they have directly exported product in Burundi.
• Bulk of revenue comes from tablets. Capex is aimed at increasing Iron Tablet capacity from 108Cr tablets to 216Cr tablets per year.
• Big jump in FY 23-24 profits is a concern.
• Medicamen Organics IPO is coming at a PE ratio of 41x (FY23 Earnings) and 16.8x (fy24earnings).
• I intend to apply in Medicamen Organics IPO subject to availability of funds. While there are not much concerns about the company, issue size is quite small and resultant oversubscription can be heavy.
• GMP as reported on social media has been 50 (147%)
• GYR Capital Advisors Pvt. Ltd is the Lead Manager to the issue. with an outstanding record. Past issues handled by them include HOAC Foods India Limited IPO, ABS Marine Services Limited, Naman In-Store (India) Limited, Koura Fine Diamond Jewelry Limited, Maxposure Limited, Kay Cee Energy & Infra Limited, Trident Techlabs Limited, Maitreya Medicare Limited, Basilic Fly Studio Limited, Srivari Spices and Foods Limited, Essen Speciality Films Limited, MCON Rasayan India Limited, Agarwal Float Glass India Limited, Anlon Technology Solutions Limited, Uma Converter Limited, Sabar Flex India Limited, Mafia Trends Limited, Pritika Engineering Components etc.
• SME IPOs are quite volatile and new retail investors need to exercise considerable caution in my view.
• 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.