Akums Drugs and Pharmaceuticals Limited IPO - Check Issue Price, Lot Size, and Other Details
Pharmaceutical contract development and manufacturing organisation Akums Drugs and Pharmaceuticals Limited is all set to come up with its initial public offering (IPO) on 30th July. The IPO consists of a fresh issue and an offer for sale.
About Akums Drugs and Pharmaceuticals Limited
Established in 2004, Akums Drugs and Pharmaceuticals Limited offers a range of pharmaceutical products and services in India and overseas. It is India's largest contract development and manufacturing organisation (CDMO) in terms of revenue, production capacity and clients served during FY23. As a CDMO, it produces an extensive range of dosage forms including tablets, capsules, liquid orals, vials, ampoules, blow-filled seals, topical preparations, eye drops, dry powder injections, and gummies, among others.
Since its inception, the company has manufactured 4,146 commercialised formulations across over 60 dosage forms. During FY2024, it manufactured formulations for 26 of the 30 leading pharmaceutical companies in terms of sales in India.
Source: RHP
IPO Details and Objectives
The table captures key details of this IPO:
| Bid Opens On | July 30, 2024 |
|---|---|
Bid Closes On | August 1, 2024 |
IPO Size | ₹1,856.74 crores in the upper price band |
Price Range | ₹646 to ₹679 |
Lot Size | 22 |
Minimum Investment | ₹14938 |
Fresh issue size | Aggregates up to ₹680 crores |
Number of equity shares in offer for sale | Up to 17,330,435 |
Face value | ₹2 |
Book running lead managers | ICICI Securities, Axis Capital Limited, Citigroup Global Markets India Private Limited, and Ambit Private Limited |
IPO Registrar | Link Intime India Private Limited |
Through the proceeds received, the company plans to:
- Repay/ prepay indebtedness of the company
- Repay/ prepay of indebtedness of its subsidiaries, namely, Maxcure Nutravedics Limited and Pure and Cure Healthcare Private Limited
- Fund incremental working capital requirements
- Pursue inorganic growth initiatives through acquisitions
- Fulfil general corporate purposes
Financial snapshot
The table captures the key financials of the company:
3516.365
3266.527
3069.048
4212.207
3700.925
3694.523
4231.451
3475.925
3874.946
(0.28)
6.63
(17.65)
(0.57)
13.23
(40.60)
4178.182
3654.820
3671.893
157.010
384.055
(69.089)
| Particulars | FY24 | FY23 | FY22 |
|---|---|---|---|
Total assets (in ₹ crores) | 3516.365 | 3266.527 | 3069.048 |
Total income (in ₹ crores) | 4212.207 | 3700.925 | 3694.523 |
Total expenses (in ₹ crores) | 4231.451 | 3475.925 | 3874.946 |
Basic and Diluted EPS | (0.28) | 6.63 | (17.65) |
Average return on net worth (in %) | (0.57) | 13.23 | (40.60) |
Revenue from operations (in ₹ crores) | 4178.182 | 3654.820 | 3671.893 |
EBITDA (in ₹ crores) | 157.010 | 384.055 | (69.089) |
Source: RHP
Offer Structure
Like any other IPO, this IPO has fixed a certain quota for its employees, qualified institutional buyers (QIBs), non-institutional bidders (NIBs), and retail individual bidders (see table).
| Allocation Quota For | Particulars |
|---|---|
Employees | The employee reservation portion shall constitute up to 5% of the post-issue paid-up equity share capital of the company. |
QIBs | Not less than 75% of the net offer shall be available for allocation to QIB bidders. |
NIBs | Not more than 15% of the net offer shall be allocated to QIB bidders |
Retail individual bidders | Not more than 10% of the net offer |
Source: RHP
Key Strengths and Strategies
Given below are the key strengths of the company:
- Largest CDMO serving the Indian pharmaceutical industry
- Diverse client base with longstanding CDMO relationships
- Large and rapidly growing R&D capabilities across our product portfolio
- Strategic presence across the pharmaceutical value chain
- Experienced and entrepreneurial management team with a proven track record and marquee healthcare-focused private equity investor
Going forward, the company has these key strategies in mind:
- Leverage its leadership position to continue to increase its market share and consolidate its position in the CDMO market
- Sustain R&D for product development across therapies and dosage forms
- Grow its domestic formulations business
- Expand its global presence through strategic initiatives
- Scale its API business
Source: RHP
Industry Overview
The Indian pharmaceutical market is among the fastest-growing pharmaceutical markets in the world, witnessing a value increase from USD 19 billion in FY19 to USD 34.2 billion in FY28. The domestic formulations market is highly consolidated, with the leading 30 companies (based on sales in FY24) contributing 77.2% of the market in FY24.
These 30 leading companies have outmatched the growth of the total pharmaceutical market, experiencing a 9.5% CAGR between FY19 and FY24. During FY24, Akums Drugs and Pharmaceuticals Ltd. (Akums) manufactured formulations for all 10 leading pharmaceutical companies and 26 of the 30 leading pharmaceutical companies in India in terms of sales.
Source: RHP
In Conclusion
Go through the company’s red herring prospectus RHP for a detailed overview of the company and its various aspects. Before subscribing, ensure the IPO fits your overall investment strategy and aligns with your risk tolerance.
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.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Please read the SEBI-prescribed Combined Risk Disclosure Document before investing. Brokerage will not exceed SEBI’s prescribed limit.
