Glenmark Life Sciences is looking to hit the market with its initial public offer (IPO) on July 27, 2021. The company plans to raise around Rs 1,514 crore through this public issue. The company specializes in developing and manufacturing Active Pharmaceutical Ingredients (APIs), with a total of 120 different APIs in their catalogue. Glenmark Life Sciences supplies APIs to 540 pharma companies in India and abroad. Internationally, the company has active clients in Europe, Latin America, North America and Japan, to name a few. Incorporated in 2011, the company now has four different manufacturing facilities in the country, which are located in Ankleshwar and Dahej in Gujarat and Mohol and Kurkumbh, in Maharashtra.
With that said, here are 10 important things that you should know before the IPO hits the open market next week.
1) The Public Issue
The size of the IPO is around Rs 1,514 crore, with a fresh issue of Rs 1,060 crore. It also comprises of an offer for sale (OFS) worth Rs 453.60 crore with a face value of Rs 2 per equity share. The OFS has an allocation of 63,00,000 shares. On Friday the grey market premium for Glenmark Life Sciences stood at Rs 200 on the grey market.
2) Important Dates to Know (Pre-IPO)
The IPO itself will open on for bidding on July 27 and will close on July 29, 2021. Any anchor booking that might take place would likely happen a day prior to July 26.
3) Price Band
Glenmark Life Sciences has an IPO price band of Rs 695 to Rs 720 per equity share. The company is planning on generating 1,497.85 crore at the lower end of the price band which is Rs 695. On the higher end of the price band at Rs 720 per share, the company plans to raise Rs 1,513.6 crore.
4) IPO Lot Size and Reservations
The company has a minimum market lot size of 20 shares at a minimum amount of Rs 14,400 for the application. On the higher end, the IPO carries a lot size of 260 shares with an application amount of Rs 187,200. Retail investors can apply for up to 13 lots at the maximum lot size range. The qualified institutional buyers (QIBs) have an investor portion of 50 per cent of the offer reserved for them. The non-institutional buyers on the other hand have a 15 per cent allocation reserved, while individual retail bidders have a 35 per cent allocation for this IPO.
5) Important Post-IPO Dates
Post the IPO the refunds for the unsuccessful bidder will be credited back to them on August 4, while the successful bidders will get their funds credited to Demat accounts the next day on August 5. The company has a tentative listing date of August 6; however, this is yet to be confirmed.
6) Object of the Offer
The company plans to use the proceeds from the public issue for the payment of outstanding purchase considerations to the promoter for the spin-off of the API business from the promoter and into the company pursuant to the Business Purchase Agreement, stated Glenmark Life Sciences in its draft red herring prospectus (DRHP). It also aims to use it to fund capital expenditure requirements as well as general corporate purposes
7) Company Financials
For the financial year of FY21, Glenmark Life reported a profit of Rs 351.58 crore as well as a revenue of Rs 1,885.16 crore for the same year. In the previous financial of FY20, it had a lower profit margin of Rs 313.09 crore upon the revenue of Rs 1,537.51 crore. This marks an upward trend in profits and revenue with the latest financial year marking the highest in returns.
8) Promoter and Promoter Group
The promoter for the company in the upcoming IPO is Glenmark Pharmaceuticals Limited and it holds a pre-IPO share of 100 per cent. The post IPO shareholdings for the same is expected to be around 82.84 per cent. The promoter group as per the DRHP outlines Glenn Saldanha and Cherylann Pinto as the main shareholders going forward. Glenn Saldanha is the Chairman and Non-Executive Director of the company.
9) Company Profile
The company specializes in developing and manufacturing Active Pharmaceutical Ingredients (APIs), with a total of 120 different APIs in its catalogue that is being distributed to its client base of 540 pharma companies across the world. It currently operates in four different facilities in India. These locations are in Ankleshwar and Dahej in Gujarat, as well as Mohol and Kurkumbh in Maharashtra with an aggregate annual installed capacity of 726.6 KL as of March 31, 2021. This capacity was at 725.8 KL as of December 31, 2020.
10) Competitive Strengths
The company is a leading manufacturer of specialized APIs that are specifically used for chronic therapeutic areas like cardiovascular disease (CVS), central nervous system disease (CNS), diabetes, and pain management, as per information on Chittorgarh. It also has strong international ties with big pharma companies and exports globally. It also has a high-quality standard of product manufacturing with R&D infrastructure according to reports. Added to this, it proven a financial track record that has improved over the years, and it makes for a strong front-runner.