GLENMARK LIFE SCIENCES LTD IPO – should you subscribe ?


Incorporated as Zorg Laboratories Private Limited in 2011, it was acquired by Glenmark Pharmaceuticals Limited in 2018. It is one of the leading developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients (APIs) is aslo providing contract development and manufacturing operations (CDMO) services to many multinational and specialty pharmaceutical companies. 90% of the revenue comes from API business. Geographically, 56% revenue comes from India and remaining 44% from foreign countries. Company has 4 manufacturing units (2 in Gujarat and 2 in Maharashtra) and 3 R&D facilities. Company exports its products to Europe, Latin America, North America, Japan, and the rest of the world.

Issue Details –
Issue Date – 27 July to 29 July
Price Band – 695 to 720rs
Lot size – 20
Issue Size – 1514cr (fresh issue – 1060cr and OFS – 454cr)
Post-Issue Market Cap – 8822 cr
Retail quota – 35%
Proposed Listing Date – 6 August
Post issue promoter holding – 83%

Negative points –
35% of its raw material comes from china.
Revenue concentration – 90% of the revenue comes from API business.
Post issue debt to equity ratio – 0.5 (which is manageable)

Positive points of the company –
IPO is priced at 25 times PE. Whereas its main competitors Divis Lab, Laurus Labs and Shilpa Medicare are trading at a P/E of 64X, 36X and 36.5X respectively.
The company has registered a 2-Yr CAGR of 45.8% and 34.1% in its sales and PAT respectively.

Strong parentage of Glenmark Pharmaceuticals.

Keeping above things in mind, one may subscribe in this IPO for listing gains.

Disclaimer – Views shared is only for educational purpose, so that you all can take a better informed decision. I am not a SEBI registered advisor. Please consult your financial advisor before making any investment.

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