Namita Thapar-backed Emcure Pharma IPO opens: GMP, price, apply or not?

Emcure Pharma IPO

Emcure Pharmaceuticals initial public offering is set to open for subscription on Wednesday, July, 3, 2024. The IPO comprises a fresh issue of 7.9 million shares totaling Rs 800.00 crores and an offer for sale of 11.4 million shares amounting to Rs 1,152.03 crores.

The pharma company raised Rs 582 crore from 48 anchor investors at the upper price band of Rs 1,008 per equity share.

The anchor book includes marquee investors such as HDFC MF, ICICI Pru MF, SBI MF, Abu Dhabi Investment Authority,  Goldman Sachs Asset Management, Nomura, HDFC Life, ICICI Pru Life, SBI Life, Birla MF, Kotak MF, Nippon MF, Mirae MF, and IIFL WhiteOak.

 

Here are the key details of Emcure Pharma IPO

Emcure Pharma IPO lot size, price band

The IPO price band is fixed at Rs 960 to Rs 1,008 per share, with a minimum lot size of 14 shares requiring an investment of Rs 14,112 for retail investors. Small non-institutional investors (sNII) need to apply for a minimum of 15 lots (210 shares), amounting to Rs 2,11,680, while big non-institutional investors (bNII) must apply for a minimum of 71 lots (994 shares), totaling Rs 10,01,952.

Emcure Pharma IPO important dates

The subscription for Emcure Pharma's IPO will open on July 3, 2024, and close on July 5, 2024. The allotment is expected to be finalised by Monday, July 8, 2024, with plans to list on both BSE and NSE tentatively scheduled for Wednesday, July 10, 2024.

Emcure Pharma IPO GMP

According to IPO information platform Chittorgarh IPO, the latest grey market premium (GMP) for Emcure Pharma is Rs 299. With a price band of Rs 1,008, the estimated listing price for the IPO is Rs 1307, projecting an expected listing gain of 29.6 percent per share.

Emcure Pharma IPO financials

In fiscal year 2023-24 (FY24), Emcure Pharmaceuticals Limited recorded a revenue growth of 11.33 per cent, amounting to Rs 6,715 crore compared to Rs 6,031 crore in FY23. However, the company's profit after tax (PAT) declined by 6.1 per cent to Rs 527 crore in FY24 from Rs 561 crore in FY23.

Emcure Pharma IPO share allotment

The company has allocated up to 50 per cent of the shares for Qualified Institutional Buyers (QIBs), at least 35 per cent for retail buyers, and a minimum of 15 per cent for Non-Institutional Investors (NIIs).

Emcure Pharma IPO lead book runners

The book running lead managers for the Emcure Pharma IPO are Kotak Mahindra Capital Company Limited, Axis Capital Limited, J.P. Morgan India Private Limited, and Jefferies India Private Limited. Link Intime India Private Ltd will serve as the registrar for the issue.

About Emcure Pharmaceuticals

Emcure Pharmaceuticals, an Indian pharmaceutical company, develops pharmaceutical products across various major therapeutic areas.

As of MAT September 2023, Emcure Pharmaceuticals Limited held the 13th rank in domestic sales among pharmaceutical companies in India and commands the 4th position in market share within its covered markets. Furthermore, the company leads in the therapeutic areas of gynaecology and HIV antivirals for the same period.

Post the IPO, the price to earnings multiple of the company will be 36.07 times with an earning per share of Rs 27.95. So should you apply?

Here’s what key brokerages say:

Anand Rathi

Analysts at Anand Rathi said that the research and development driven company has a differentiated product portfolio including orals, injectables and biotherapeutics, which has enabled the company to reach a range of target markets across over 70 countries, with a strong presence in India, Europe and Canada.

On the valuation front, at an upper band, the company is fairly priced at a P/E of 36x post issue of equity shares on FY24 earning basis. We believe that the company has a scope of business improvement on the back of industry tailwinds and business scalability, analysts said. 

The brokerage recommended subscribing to the IPO from a long term lens.

Swastika Investmart

The brokerage contended that Emcure has demonstrated consistent top-line growth, although recent profitability has seen a slight decline due to interest expenses and depreciation.

However, some key risks require careful consideration, analysts noted. They said that the pharmaceutical industry is highly regulated, and Emcure faces potential disruptions to its raw material supply chain. Additionally, the company relies on third parties for product marketing and distribution. 

“Considering the company's strengths, growth trajectory, and the potential for debt reduction post-IPO, we view the P/E valuation of 36.6x as reasonable. We recommend applying for this IPO with a long-term view,” the brokerage wrote in an IPO note.