Emcure Pharma seeks to raise Rs 1,952 cr through IPO, issue opens July 3

Fourth largest IPO of 2024; company will use the proceeds to repay debt and for general corporate purposes

Emcure Pharmaceuticals has set a price band of Rs 960-1008 per share for its initial public offering (IPO) that opens for subscription on July 3. The Pune-based company seeks to raise up to Rs 1952 crore through a fresh issue of 7.9 million equity shares (aggregating up to Rs 800 crore) and an offer for sale (OFS) of 11.4 million shares (aggregating up to Rs 1152.03 crore).

The IPO, which will be open for subscription till July 5, will be the fourth biggest of 2024 after Bharti Hexacom (Rs 4,275 crore) Aadhar Housing (Rs 3,000 crore) and Go Digit (Rs 2,614 crore).

 

Emcure will use the IPO’s proceeds for payment of debt and general corporate purposes. As on September 30, 2023, Emcure had total outstanding borrowings of Rs 2,012.8 crore on a consolidated basis. The net proceeds will be used to pay all or a portion of the principal amount on certain borrowings and the accrued interest.

Emcure filed a draft red herring prospectus in December and got market regulator Sebi’s approval earlier this month.

Emcure filed draft papers for its IPO for the first time in August 2021, outlining a fresh issue of Rs 1100 crore and OFS of 18 million equity shares. At that time the fund-raising target was estimated to be around Rs 4500-5000 crore, according to market sources. The company received Sebi’s approval in December 2021 but it did not launch the IPO at the time.

“At the time we were planning to come up with the IPO, the Ukraine-Russia escalation happened, and we felt that we will wait for an opportune time,” Satish Mehta, chief executive officer and managing director of Emcure Pharmaceuticals, told ‘Business Standard’ on Friday.

Emcure would be open to inorganic opportunities after the listing, he said. It acquired Canada's International Pharmaceutical Generics and its marketing arm Marcan Pharmaceuticals in 2016, and Tillomed in the United Kingdom in 2014.

In the domestic market, where it has grown organically, it would focus on women’s health and chronic therapy areas. In March, Emcure made a deal to exclusively distribute and promote Sanofi India’s cardiovascular brands Cardace, Clexane, Targocid, Lasix, and Lasilactone

“We have a poll position in women's health, and at the same time, there is a lot to be done in this space as there are gaps in the existing market. We can go into Tier-II and Tier-3 cities, and focus on reach and penetration. There are around 25,000 gynaecologists and around 35-40 percent have been covered in our universe,” said Mehta.

“My daughter Namitha Thapar (who is an executive director of Emcure) is extremely passionate about the women's health segment and we intend to do a lot of work in that area. We have a reasonably good position in the IVF segment. As women's health is a neglected area, the more the country keeps spending on healthcare at large; women's health will receive more attention,” said Mehta, referring to in vitro fertilization.

Emcure (along with its arm Zuventus) ranked twelfth in the domestic pharmaceutical market as of May 2024, according to Pharmarack. Its product portfolio includes orals, injectables, biotherapeutics and has a presence in 70 countries including places in Europe and Canada.

“As for our subsidiary Zuventus, it is more acute therapy focused. This is actually a great thing as the parent firm Emcure is more chronic focussed, while Zuventus is more acute focussed. It will remain that way,” Mehta said.

Gennova Biopharmaceuticals, the company’s biotech arm, will continue to focus on research on the m-RNA platform to come up with solutions for more disease areas. Gennova developed an indigenous m-RNA-based Covid-19 vaccine during the pandemic.

Emcure has 13 manufacturing facilities in Maharashtra, Gujarat, Sikkim, Karnataka, and Jammu and Kashmir, in India.” We have sufficient capacity at our disposal at the moment, there are a few factories that we have commissioned very recently,” said Mehta.