Glenmark Life Sciences Limited (GLS), a leading developer and manufacturer of active pharmaceutical ingredients, plans to open its Initial Public Offering on July 27, 2021. The IPO size is about Rs 1,500 crore. With chemicals and pharma stocks now darlings of Dalal Street, it is expected GLS IPO will be an attractive bet. Here are more details.
The offer comprises equity shares of face value of â‚¹2 each of Glenmark Life Sciences Limited comprising a fresh issue aggregating to â‚¹10,600 million and an offer for sale of up to 6,300,000 equity shares by Glenmark Pharmaceuticals Limited (promoter) aggregating to â‚¹453.60 million.
The price band of the offer has been fixed at â‚¹695 to â‚¹720 per equity share. Bids can be made for a minimum of 20 equity shares and in multiples of 20 Shares thereafter.
Post-issue, promoters holding in Glenmark Life Sciences will come down to 82.84% from 100%.
This will be a book built issue (IPO).
Out of the total IPO proceeds, Rs 800 crore would be used for payment of outstanding purchase consideration to the promoter for the spin-off of the API business from the Promoter into the company and another Rs 152.76 crore would be used for funding the capital expenditure requirements.
Glenmark Life Sciences is a wholly-owned subsidiary of Glenmark PharmaceuticalS. GLS is a leading developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients (APIs) in chronic therapeutic areas.
GLS operates two business lines â€“ Generic APIs (generics and complex APIs) and CDMO (including specialty). GLS has strong market share in select specialized APIs such as Telmisartan (anti-hypertensive), Atovaquone (anti-parasitic), Perindopril (anti-hypertensive), Teneligliptin (diabetes), Zonisamide (CNS) and Adapalene (dermatology).
They are also increasingly providing contract development and manufacturing operations (CDMO) services to a range of multinational and specialty pharmaceutical companies.
As of March 1, 2021, GLS had a portfolio of 120 molecules globally and sold their APIs in India and exported their APIs to multiple countries in Europe, North America, Latin America, Japan and the rest of the world. They work towards developing 8 to 10 molecules each year. As of May 31, 2021, they had filed 403 Drug Master Files (DMFs) and Certificates of suitability to the monographs of the European Pharmacopoeia (CEPs) across various major markets. Out of 20 largest generic companies globally, 16 were their customers.
On the financial performance front, the company has reported turnover/net profits of Rs 1,549.30 crore and Rs 313.10 crore in FY20 while it has posted Rs 1,885.98 crore and Rs 351.58 crore in FY21.
For the last three financial years, Glenmark Life Sciences has posted an average EPS of Rs 30.09. On a fully diluted post IPO equity capital, then the IPO price is at a P/E of around 50 based on FY21 numbers.
The API market is highly fragmented with about 1,500 API manufacturing plants. The key competitors in the API market include Laurus Labs, Divis Labs, Shilpa Medicare, Aarti Drugs and Solara Active Pharma Sciences. Their P/E is between 25 times to 65 times.
* Leadership in Select High Value, Non-Commoditized APIs in Chronic Therapeutic Areas
* Strong Relationships with Leading Global Generic Companies
* Quality-Focused Compliant Manufacturing and R&D Infrastructure
* Strong Focus on Sustainability in Operations
* Cost Leadership across Products through Careful Monitoring and Continuous Effort
* Experienced Management Team with Proven Track Record
|â‚¹695 to â‚¹720 per share
|Share face value
|â‚¹2 per share