Senores Pharmaceuticals IPO opens today: GMP up 38%; Should you apply?

Senores Pharma IPO opens today, December 20, 2024, and closes for subscription on December 24, 2024. Check issue size, price band, lot size, GMP, reviews, and other key details here

Senores Pharma IPO opens today: The initial public offering (IPO) of research-driven pharmaceutical company, Senores Pharmaceuticals, opens for public subscription today. The company has stated that it has already raised Rs 260.63 crore from anchor investors, with the bidding concluded on December 19, 2024.  Senores Pharma IPO is a book-built issue of Rs 582.11 crore, comprising a fresh issue of 1,27,87,723 equity shares and an offer for sale, with promoters and others divesting up to 21,00,000 shares with a face value of Rs 10 apiece.

 

The company has set the price band at Rs 372-391 per share, with a lot size of 38 shares for the public offering. Accordingly, investors can bid for a minimum of 38 shares and in multiples thereof. To bid for one lot of 38 shares of Senores Pharma IPO, a retail investor would require a minimum of Rs 14,858, while Rs 1,93,154 would be required to bid for a maximum of 13 lots or 494 shares. 

 

 

Meanwhile, the unlisted shares of Senores Pharma were commanding a solid premium in the grey market ahead of the IPO launch. Unlisted shares of Senores Pharma were trading at Rs 541 apiece, reflecting a grey market premium (GMP) of Rs 150 or 38.36 per cent, against the upper end of the IPO price of Rs 391, revealed sources tracking unofficial markets.

 

Senores Pharma IPO will remain available for subscription till Tuesday, December 24, 2024. Following this, the basis of allotment for Senores Pharma IPO shares is expected to be finalised tentatively on Thursday, December 26, 2024, and the company’s shares will be credited to demat accounts on Friday, December 27, 2024.

 

Shares of Senores Pharma are expected to list on BSE and NSE tentatively on Monday, December 30, 2024.

 

Link Intime India is the registrar of the public offering, while Equirus Capital, Ambit, and Nuvama Wealth Management are the book-running lead managers.

 

According to the Red Herring Prospectus (RHP), the company will not receive any proceeds from the offer for sale, as these will go to the selling shareholders after deducting expenses and taxes. 

 

Proceeds from the fresh issue will be used to fund capital expenditure for setting up a sterile injections manufacturing facility for its subsidiary, Havix Group, Inc., and to repay or prepay borrowings of the company and its subsidiaries. The funds will also support working capital requirements, facilitate inorganic growth through acquisitions and strategic initiatives, and be allocated for general corporate purposes.

 

Should you subscribe to Senores Pharm IPO? 

Anand Rathi Research - Subscribe

Analysts at Anand Rathi Research have assigned a ‘Subscribe’ rating to the IPO. At the upper price band, the company is valued at a P/E of 55x, with a market cap of Rs 18,000.6 crore post the issue and a return on net worth of 23.6 per cent based on FY24. "On the valuation front, we believe that the company is fairly priced. Therefore, we recommend a 'Subscribe' rating," wrote analysts in a research note.

 

Deven Choksey Research - neutral

Karan Kamdar (CA), Research Analyst at Deven Choksey Research, has assigned a ‘Neutral’ rating to the IPO. Despite decent profitability (PAT margin of 15.3 per cent), Senores Pharma underperforms on capital efficiency, with ROCE at 11.7 per cent, far below leaders like Ajanta Pharma (32.2 per cent).

 

"The company’s overreliance on regulated markets, especially the US, and a few key customers increases vulnerability to market-specific risks. Operational challenges, including dependence on a single FDA facility and high working capital needs, add to concerns," Kamdar added.

 

Valued at a steep P/E of 55.1x, the stock already factors in much of its growth potential, leaving limited upside. "Considering current risks and high valuation, we maintain a ‘Neutral’ rating for the IPO," he noted.

 

About Senores Pharmaceuticals

Incorporated in December 2017, Senores Pharmaceuticals is a global research-driven pharmaceutical company focused on developing and manufacturing a wide range of pharmaceutical products, mainly for regulated markets in the US and Canada. As of September 30, 2024, the company had launched 55 products in key therapeutic areas, including antibiotics and antifungal treatments.

 

Senores Pharmaceuticals has partnerships with distributors and hospitals across several states in India and operates in emerging markets across 43 countries. The company manufactures critical care injectables and APIs and operates three dedicated R&D facilities in India and the US.