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Senores Pharmaceuticals Limited develops and manufactures a range of pharmaceutical products primarily for the regulated markets of the US, Canada, and the UK, while also serving emerging markets. Senores Pharmaceuticals IPO intends to raise Rs 582.11 crores. The issue is a combination of fresh issue aggregating to Rs 500 crores and offer for sale aggregating to Rs 82.11 crores.

About Senores Pharmaceuticals

• Senores Pharmaceuticals specializes in identifying, developing, and manufacturing a wide array of specialty, underserved, and complex pharmaceutical products, positioning itself as a preferred partner for select customers. The company has several products in major therapeutic segments including antibiotics, anti-bacterial, anti-fungal and blood line.
• Manufacturing facilities:
  • Atlanta Facility: It is a US FDA approved facility for manufacturing oral solid dosages. The facility has been audited by the USFDA 4 times since its commencement, with last audit completed in April 2024. The Atlanta Facility had an annual installed capacity of 202.5 Mn tablets and capsules as of H1FY25, with a capacity utilization of 73.6%.
  • Chhatral Facility s located in Gujarat and is a WHO-GMP approved facility capable of manufacturing oral solids, oral liquids, injectables, and oral rehydration solutions (ORS). It has 12 manufacturing lines. It has separate facilities for Cephalosporins and Beta Lactam products
• As of March 2024, the company had three R&D facilities in India and the US and is in the process of consolidating its R&D facilities into one proposed dedicated facility in Ahmedabad.

Financials : Senores Pharmaceuticals IPO

Anchors: Senores Pharmaceuticals IPO

Senores Pharmaceuticals Ltd. raised Rs 260.6 crore from anchor investors and allotted 6.66 crore shares to 20 anchor investors. ICICI Prudential Pharma Healthcare And Diagnostics (P.H.D) Fund and Aditya Birla Sun Life Insurance Co. got the highest allocation of 19.18%. Mahindra Manulife Large and Mid Cap Fund ,ICICI Prudential Mutual Fund, Mahindra Manulife Mutual Fund, Aditya Birla Sun Life Insurance Company, SBI General Insurance Company, and Troo Capital were other investors.

Salient Points: Senores Pharmaceuticals IPO

• The US Pharmaceutical Market was valued at USD 711 bn in CY23 and accounted for ~43% of the global market, The market has grown at a CAGR of ~7.6% between CY18-CY23. Going forward, the market is expected to grow at a CAGR of ~7.3% between CY23-CY28F. .
• Senores Pharmaceuticals focuses on manufacturing and developing affordable and high quality complex generics certified by global food and drugs authorities.
• They deliver high quality complex generics to 49 countries.
• Their Atlanta facility enables it to service US government business as well.
• The company also uses Atlanta Facility to engage in CDMO/ CMO business in the US, Canada, and United Kingdom. 
• Net proceeds from fresh issue will be utilized for
  • setting up a manufacturing facility for production of sterile injections in its Atlanta facility;
  • funding the working capital requirements of the company and its subsidiaries,
  • supporting inorganic growth through acquisition and other strategic initiatives and
  • payment of debt.
  • general corporate purposes.

• Peers

• Company has created long-term agreements with Lannett Company Inc., Prasco LLC, Jubilant Cadista Pharmaceuticals Inc., Sun Pharmaceuticals Industries Limited, Cintex Services LLC , Cipla USA Inc., Alkem Laboratories Limited, Dr. Reddy’s Laboratories Inc etc.
• Its revenue model includes (i) an in-licensing fee on negotiated basis based on various milestones; (ii) transfer price; and (iii) profit share
• Company has a strategy is to target the development and manufacturing of specialty, niche and difficult to manufacture complex products. This has paid off as reflected in the financials.
• Senores Pharmaceuticals IPO business has scaled up considerably due to two acquisitions. First was 67% stake acquired in May 2023 in Havix Group, which had a US FDA approved manufacturing facility in US and (second was a 69% stake bought in Dec 2023, in Indian company Ratnatris Pharma. Due to this H1FY25 results are a better reflection of the business.  
• As of Sept 30, 2024, they received approvals for 19 ANDAs and have commercialized 21 products in the US and Canada markets on the basis of these ANDAs.
• Between January 2018 and May 2024, 40% of company‘s approvals received Competitive Generic Therapeutic (CGT) designation. This exceeded the industry average of 29.2%. CGT designation provides six months of marketing exclusivity for these products.
• PE (FY25 annualized) – 37.6x ; PE FY24 55x
• The Company has delivered a robust Revenue/EBITDA/PAT CAGR between FY22 and FY24 which stands at 289.1%/361.6%/474.5% respectively.
• I intend to apply in Senores Pharmaceuticals IPO. Excellent growth in last two years, focus on regulated markets should do well for this pharma company even as it is asking a very steep valuation. The small size of operations compared to peers and valuations demanded could limit the gains on listing.
• GMP as per social media ruled about Rs. 190 (48%)
• This post is exploratory and educational purposes only.
• 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.