India supplies the most generic drugs globally, and its vaccines and medicines are reputed to be very affordable. Over fifty per cent of vaccine demands globally, forty per cent of America’s generic drug needs and twenty-five per cent of the United Kingdom’s medicine requirements are met by the Indian pharmaceutical industry. There are three thousand drug companies with ten thousand five hundred manufacturing units in the domestic market alone.
Medicamen Organics Limited is a large pharmaceutical company based out of India. It has gained domestic and international recognition for its commitment to quality, compliance with regulations, and innovative thinking, which has helped it expand into multiple countries.
The recent announcement of Medicamen Organics Limited’s initial public offering has put the company in the spotlight. This article embraces all there is to know about this business and its IPO.
About Mediorg Ltd
Medicamen Organics Limited is a pharmaceutical dosage development company that was established in 1995. Their 84 products include antidiabetic, lipid-lowering, multimineral, nonsteroidal anti-inflammatory drugs (NSAIDs), antimalarial, antibacterial, and antifungal antiparasitic agents.
The primary operational strategy of Medicamen Organics Ltd is based on the B2B contract manufacturing model. Pharmaceutical companies are considered third-party providers by the organisation. These partners sell and market Medicamen Organics’ products worldwide. Emphasis is on generics and ethical marketing.
The number of product registrations held by Medicamen Organics’ partners amounts to eighty-four as of March 31, 2024. The company owns development rights, while the partners hold marketing rights. India is one of the essential markets that this business model covers. Medicamen Organics works with 12 merchant exporters and 44 domestic partners for contract manufacturing.
Mediorg IPO details
The Medicamen Organics initial public offering (IPO) is a book-built issue for ₹10.54 crores. The issue is a brand-new offering of 31 lakh shares.
The initial public offering price range for Medicamen Organics is ₹32 to ₹34 per share. An application needs a lot of size, which is 4000 shares. For retail investors, the least they can put in is ₹136,000. For HNIs, the smallest amount they can invest is two lots, which are 8,000 shares and cost ₹272,000.
GYR Capital Advisors Private Limited, the book-running lead manager, manages the issue. Kfin Technologies Limited is in charge of registration. Giriraj Stock Broking is in charge of making the market for the Medicamen Organics IPO.
Important dates
| Particulars | Date |
| Subscription open | June 21 |
| Subscription closes | June 25 |
| Listing date | June 28 |
Source: RHP – Medicamen Organics Ltd
This is how the net proceeds from the Medicamen Organics IPO are proposed to be spent:
- Getting products registered in international markets: The business needs money to get its products registered in other countries. It helps them sell their medicines globally.
- Plant updation and increased production capacity: Medicamen Organics plans to improve its factories and make more medicines. In this way, they can keep up with the rising demand for their goods.
- Need for working capital: Some of the money will be used for everyday costs, like paying employees and keeping track of the stock.
- General goals of the company: The rest of the money will be used for things like marketing or research that the business needs.
Financial position of Mediorg Ltd
Here are some of the most important financial numbers for Medicamen Organics Ltd:
| For the year ended March 31, 2024(in ₹lakhs) | For the year ended March 31, 2023(in ₹lakhs) | |
| Share capital | 860.00 | 600.00 |
| Net worth | 1518.40 | 897.99 |
| Total revenue | 2527.17 | 2,214.71 |
| Profit for the period | 240.41 | 96.93 |
| Earnings per share (₹) | 3.18 | 1.62 |
| Net asset value per share (₹) | 17.66 | 14.97 |
| Total borrowings | 1265.65 | 1179.50 |
Source: RHP – Medicamen Organics Ltd
Risks and strengths
Risks
- Legal proceedings and claims: The company, its directors, and its promoters are all in court cases right now. Making bad choices could cost the company money and hurt its reputation.
- Approval and licensing challenges: For its business to run, Medicamen Organics needs several different approvals, licences, and permits. It could affect their operations if they have to wait or fail to get these.
- Raw material price fluctuations: Changes in the prices of raw materials affect how much money the company makes. Fluctuations may affect their cost structure and overall financial health. In 2024 and 2023, the number of raw materials used was 1439.94 lakhs and 1398.16 lakhs, respectively.
- Customer dependency: Medicamen Organics relies heavily on a few major customers for sales. Their profits and revenue could be hit hard if any of these customers walk away. As of March 31, 2024, 78.76% were accounted for by the ten biggest clients over the fiscal year sales.
- Supplier dependency: The business relies on a few suppliers only; therefore, losing any might mess up its production or supply chain. During F/Y ended Mar’24, the top ten vendors represented 65.20% against all purchases made throughout that period.
- Interest provisions compliance: As per the MSMED Act of 2006, interest provisions have not been considered in restated financials. This regulatory non-compliance poses a risk.
- Leased premises vulnerability: Medicamen Organics operates from leased premises. Any changes that take away their rights as a licensee or the end of lease agreements could hurt their business.
- Related party transactions: The Company has engaged in transactions with related parties and may undertake more of them in the future. Such transactions can pose conflicts of interest and financial risks.
- Intellectual property challenges: It is essential to ensure that intellectual property rights are adequately protected and enforced; otherwise, this may stifle their ability to compete adequately.
- Corporate record tracing issues: Some corporate records about changes, transfers, and allocations of share capital can’t be found. The failure to submit the needed documents to the Registrar of Companies (ROC) results in non-compliance.
Strengths
- Experienced management team: This pharmaceutical firm has several competent managers with proven track records. Their strategic thinking and vision have led to growth and the use of successful strategies.
- Wide range of products: Medicamen Organics manufactures numerous items like tablets, lotions, jellies and liquids which have various uses such as anti-bacterial properties, antifungal agents or treatment against diarrhoea, to mention but a few. Operating under different brand names globally enhances their market presence.
- Geographical diversification: The business is present in India as well as in international markets such as Congo, Benin, Myanmar, and Kenya. Having a variety of income sources lowers the risk of income concentration and creates new chances for growth.
- Scalable business model: Medicamen Organics follows a customer-centric and order-driven business model. Optimal resource utilisation, quality supply, and consistent output contribute to scalability.
- Quality assurance: The World Health Organisation’s Good Manufacturing Practice (GMP) guidelines have approved the company’s manufacturing facilities. Being certified with ISO 9001:2015 ensures that they follow quality management systems standards.
Bottomline
Investing in Medicamen Organics’ Initial Public Offering (IPO) is a great opportunity because it demonstrates their strengths as well as strategic plans to leverage the increasing global demand for pharmaceuticals. Medicamen Organics is in a good position to reach its growth goals and provide value to its stakeholders by carefully managing its risks and building on its strengths.
