Gland Pharma IPO: Expensive at a price tag of 30x the FY20 earnings

While prospects remain strong led by niche products and a differentiated business model, relatively rich valuations leave limited scope for upside in near-term

The Rs 6,400-crore initial public offering (IPO) by Hyderabad-based Gland Pharma is a play on the high-margin injectables space.

Injectables are difficult to manufacture and thus, face lower competitive intensity.

Gland Pharma, which is launching the country’s largest pharma IPO, has an extensive product range and track record of developing, manufacturing, and marketing complex injectables.

The company seeks to tap into the growth opportunity in the generic injectables segment, which is expected to see $68 billion worth of drugs go off patent between 2021 and 2025. 

While prospects in this niche segment are sound, the Street is not comfortable with