The covid-19 phase called for efficient pharmaceutical companies and infrastructure in India. However, it highlighted how strongly India stands at the leading position in providing generic medicine to the world. People in India are having longer lives than their ancestors. The major credit for the same goes to the constant R&D in the pharmaceutical sector.
One such pharma company is coming with its IPO. So, what else would be a golden chance? Let us talk about the Emcure Pharmaceuticals IPO.
Emcure Pharmaceuticals Ltd manufactures some leading gynaecology and HIV antiviral products and other pharma products. It sails among the top 10 pharmaceutical companies in India, as of September 2023 regarding domestic sales. Emcure Pharmaceuticals in the past, has shown a great knack toward R&D for its products and is expected to have a promising growth trajectory with this attitude in the upcoming years.
About the company
Emcure Pharmaceuticals Ltd is an Indian company that manufactures, develops and markets a whole range of varied pharmaceutical products. The company produces pharmaceutical and biopharmaceutical products in its 13 manufacturing plants in India. The speciality products of the company include:
- Injectables
- Photo-chemistry products
- Chiral molecules
- Biotherapeutics.
The company stands as the no.1 market player in the Indian gynaecology market with approx 13% market share. It also has a strong market share in therapeutic areas such as:
- Cardiovascular
- Gynaecology
- HIV antivirals
- Oncology
- Pain and analgesics, etc.
This entity has consistently outperformed Indian pharma export growth (11.51%) with its growth of 18.32% between FY 2019 to FY 2023. The company has its operations in over 70 countries apart from India. The company has rewarding markets predominantly in India and foreign countries like Canada and Europe.
Read this: What Is Initial Public Offer?
All about the Emcure Pharmaceuticals Ltd IPO
The IPO of Emcure Pharmaceuticals Ltd is offering 1.93 crore equity shares to the public, which would raise ₹1952.03 for the company.
The pharmaceutical company will raise these funds to repay some outstanding borrowings and for general corporate purposes such as for maintenance of plants, facility upgradation, etc.
| IPO price range | ₹960 – ₹1008 per share |
| Lot size | 14 shares |
| Fresh Issue | ₹800 crores |
| Offer-for-sale | ₹1152.03 crores |
| IPO Opening Date | July 3, 2024-(Wednesday) |
| IPO Closing Date | July 5, 2024-(Friday) |
| Listing Date | July 10, 2024-(Wednesday) |
Source: RHP
The minimum investment for retail investors is set to be ₹14,112. Link Intime Pvt Ltd is in charge of registrations. The book-running lead managers for Emcure Pharmaceuticals IPO are as follows:
- Kotak Mahindra Capital Company Ltd.
- Axis Capital Ltd.
- Jefferies India Pvt Ltd.
- J.P.Morgan India Pvt Ltd.
Key financials
(Amount in INR crores)
| Particulars | Till September 2023 (9MFY24) | FY 2023 | FY 2022 |
| Net worth | 2750.96 | 2501.12 | 1987.54 |
| Total revenue | 3,235.56 | 6,031.71 | 5918.86 |
| Net profit | 286.80 | 561.84 | 702.55 |
| Total borrowings | 2012.86 | 2202.42 | 2102.19 |
| Operating cash flow | 554.27 | 746.85 | 768.20 |
| Return on Capital Employed | 11.5% | 22.15% | 21.69% |
| Return on Equity | 9.84% | 21.21% | 33.23% |
Source: RHP
Some insights from the financial performance of the company are:
- Nearly half of the revenues for the company comes from the domestic market.
- The sales in the domestic market for the company grew approximately by 10% CAGR from FY2019 to FY2023.
- The net profit margin in September 2023 is 9.31%, which should be improved to match the efficiency levels in the Indian pharma industry.
- The company is intensively focusing on R&D but has maintained its R&D cost-to-revenue ratio at a level of 4% till September 2023.
Compared to other market players, the company has some hurdles of weak financial outcomes. However, the recent fundraising focuses on debt repayments and corporate expenses that can potentially improve the financial indicators of the company.
Also read: NFO or IPO – What do you think is the better option?
SWOT analysis
| Strength | Weakness | Opportunities | Threat |
| Strong brand-building capacity. Its 62 brands have domestic sales of more than 20 crores. | The negative net profit growth of approx 20%, and decreasing operating cash flow, | Growing focus on gynaecology and HIV treatment. | International presence is exposed to exchange rate fluctuation risk. |
| Granted 210 patents and 1800 dossiers globally by September 2023 | For procuring raw materials, Emcure heavily depends on third-party suppliers. | Pharmaceutical sector growth in India is expected to be approx 10% from 2023 to 2028 | The pharma sectors usually experience stringent regulations in India and from USFDA |
Bottomline
Emcure Pharmaceuticals Ltd. was established in the year 1981 and has today grown to be one of the most trusted pharma brands in the country. The company is focusing on strengthening its gynaecology market (where it is leading) and manufacturing products used for chronic therapy. The company is ranked 13th in terms of its largest domestic market sales.
The company’s all-time director- Namita Thapar, made the Emcure brand famous in the TV reality show ‘Shark Tank’ which gained the company huge praise for its management team and ‘women healthcare’ focusing market. Moreover, the strong product portfolio and IPO valuations make it an attractive opportunity for investors to invest in the Emcure Pharmaceuticals IPO.
