Akums Drugs and Pharmaceuticals Limited IPO - Unveiling the Company’s Key Strengths
With an issue size of ₹1,856.74 crores, D-street is ready for Akums Drugs and Pharmaceuticals Limited’s initial public offering (IPO) on July 30. The company is the largest India-focussed contract development and manufacturing organisation (CDMO) in terms of revenue, production capacity, and clients served during FY23.
Source: KSL
During FY2024, it had a market share of 30.2% of the Indian domestic CDMO market by value, which increased from 26.7% during FY2021. The company boasts several competitive strengths that make it stand out.
Source: RHP
Strengths of Akum Drugs and Pharmaceuticals Limited
Here are some of the key strengths of the company:
- Largest CDMO serving the Indian pharmaceutical industry
Akums Drugs and Pharmaceuticals Ltd became the largest CDMO in India during FY23 in terms of clients served, revenue, and production capacity. The company offers a comprehensive range of pharma products and services.
Along with its subsidiaries, as of March 31, 2024, it operates 12 manufacturing units with a cumulative formulations manufacturing capacity aggregating to 49.23 billion units annually. During FY2024, the company had a market share of 30.2% by value in the Indian domestic CDMO market.
Source: RHP
- Diverse client base with longstanding CDMO relationships
As of March 31, 2024, the company's client base for its CDMO business comprised 1,524 Indian and multinational pharmaceutical and wellness companies, an increase from 1,386 as of March 31, 2022. The firm's client base includes a diverse range of clients, such as pharmaceutical companies, nutraceutical companies, cosmo-derma companies, wellness companies, e-commerce companies, healthcare providers, and central and state government entities.
During FY2024, the company manufactured formulations for 26 of the leading 30 pharmaceutical companies in terms of sales in India. It has benefitted from repeat orders in the past five years from 38 of our 50 largest clients in terms of revenue for its CDMO business, as of March 31, 2024.
Source: RHP
- Large and rapidly growing R&D capabilities across product portfolio
The company offers differentiated products and services. Its in-house product strategy team conceptualises new formulations based on emerging epidemiological trends, global product approvals and opportunities within the pharmaceutical, wellness, and nutraceutical sectors. As of March 31, 2024, the company operates four dedicated R&D units and engaged 406 R&D scientists across its businesses.
Two of its R&D units have been approved by the Department of Scientific and Industrial Research, Government of India. As of March 31, 2024, the company has obtained 1,448 trademarks across various dosage forms and formulations. Further, as of March 31, 2024, it has procured 927 Drug Controller General of India (DCGI) approvals and five patents.
Source: RHP
- Strategic presence across the pharmaceutical value chain
Akums presence in the Indian pharmaceutical landscape is augmented by its strong domestic CDMO presence and amplified through its global export initiatives. This gives the company a competitive edge in the industry, allowing it to navigate growth opportunities across multiple markets.
Moreover, its adherence to global regulatory standards reinforces its ability to contribute to global healthcare solutions, expanding its footprint in overseas markets. As of March 31, 2024, it carries out the export of branded formulations and has established a global presence across 65 countries. The company has 289 dossiers under registration.
Source: RHP
Summing it Up
One will have to wait and watch how investors respond to this IPO. The IPO’s lot size is 22, and its price range is Rs 646 to 679 . For exclusive details, go through the company’s red herring prospectus.
Source: KSL
Disclaimer: This article is for informational purposes only and does not constitute financial advice. It is not produced by the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The information presented is compiled from several secondary sources available on the internet and may change over time. Investors should conduct their own research and consult with financial professionals before making any investment decisions. Read the full disclaimer here.
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