On its second bid day, investors are responding favourably to Akums Drugs and Pharmaceuticals' initial public offering, which comes as the Nity 50 is about to reach 25,000 levels in a bull market. Akums Drugs and Pharmaceuticals IPO subscription status is 4.43 times, according to BSE data.
The price band for the initial public offering (IPO) of Akums Drugs and Pharmaceuticals Limited is ₹646 to ₹679 per equity share, with a face value of ₹2. The subscription period for the Akums Drug IPO is set for Tuesday, July 30, and it will end on Thursday, August 1. The IPO lot size for Akums Drugs & Pharmaceuticals is 22 equity shares, and subsequently, in multiples of 22 equity shares.
The IPO consists of an offer-for-sale (OFS) of 1.73 crore shares valued at ₹1,177 crore at the top end of the price range by promoters and an existing investor, in addition to a new issue of equity shares priced at ₹680 crore. Sandeep Jain, Ruby QC Investment Holdings Pte Ltd, and Sanjeev Jain are the ones selling their shares in the OFS.
The shares will be refunded to the allottees' demat accounts on the same day as the refund, and the firm will begin initiating reimbursements on Monday, August 5, tentatively, based on the finalisation of the Akums Drug IPO basis of share allocation on Friday, August 2.
Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.
Taken together, the promoters own 121,465,630 Equity Shares in their company (which comprises 33,000 equity shares jointly held by Sanjeev and Arushi Jain, 5,500 equity shares jointly held by Sandeep and Kanishk Jain, and 5,500 equity shares jointly held by Sandeep and Manan Jain). This amounts to 82.44% of the fully diluted equity share capital of their company that has been issued, subscribed for, and paid up.
Sanjeev and Sandeep Jain, respectively, transferred 32,100,000 equity shares each to the Promoter Trust on May 16, 2024. Following the previously mentioned transfer, Sanjeev Jain, Sandeep Jain, and the Promoter Trust now own 28,625,940 Equity Shares, 28,639,690 Equity Shares, and 64,200,000 Equity Shares, respectively. These amounts represent 19.43%, 19.44%, and 43.57%, fully diluted, of the company's issued, subscribed, and paid-up Equity Share capital.
The listed peers of the company are Divi's Laboratories (P/E of 74.99), Suven Pharma (P/E of 69.54), Gland Pharma (P/E of 42.45), Torrent Pharma (P/E of 60.20), Alkem Laboratories (P/E of 34.18), Eris Lifesciences (P/E of 34.95), JB Chemicals (P/E of 51.38), Mankind Pharma (P/E of 44.65), and Innova Captab (with a P/E of 29.91).
The company offers a broad range of pharmaceutical products and services both domestically in India and abroad as a pharmaceutical contract development and manufacturing organisation (CDMO). Offering clients full-cycle product development and production solutions is the company's main focus. Being one of the leading CDMOs in India, they own the patents for several of their formulations' production methods.
The pharmaceutical industry in India faces a number of significant challenges, according to the F&S Report, including the high capital costs associated with establishing and maintaining sizable manufacturing units, the need for skilled labor, experienced R&D personnel, pressure to maintain consistent quality control, supply chain disruptions, and protracted regulatory and client approval and inspection procedures, among others. The Indian pharmaceutical industry is expanding due to a number of factors including a rise in the number of chronic patients, insurance coverage, trade generics, demand from tier II and tier III cities, and government initiatives aimed at facilitating medication access.
The firm runs 12 manufacturing units as of March 31, 2024: 8 in Haridwar, Uttarakhand; 1 in Kotdwar, Uttarakhand; 1 in Baddi, Himachal Pradesh; and 1 in each of Dera Bassi and Lalru, Punjab. Four research and development (R&D) centers are run by the company as of March 31, 2024; two of them are in Haridwar, Uttarakhand; one is in Mumbai, Maharashtra; and one is in Barwala, Haryana.
Akums Drugs' group companies are Akome Lifecare Private Ltd, Amazing Research Laboratories Ltd, May and Baker Pharmaceuticals Ltd, Hygosap Pharma Private Ltd, Welcure Pharmaceuticals Private Ltd, and Akums Foundation.
The company's dedication to consistency and trust is seen in the long-standing connections they have with its clientele. Key clients for their CDMO business as of March 31, 2024, include, among others, UCB, Amishi Consumer Technologies (The Mom's Co), Alembic Pharmaceuticals, Alkem Laboratories, Blue Cross Laboratories, Cipla, Dabur India, Dr. Reddy's Laboratories, Hetero Healthcare, Ipca Laboratories, Mankind Pharma, MedPlus Health Services, Micro Labs, Mylan Pharmaceuticals, Natco Pharma, Sun Pharmaceutical Industries, and UCB.
While sales increased by 13.81%, Akums Drugs and Pharmaceuticals Limited's profit after tax (PAT) fell by -99.19% between March 31, 2024, and March 31, 2023.
A 90-day lock-in period applies to 50% of the equity shares allotted to anchor investors under the anchor investor portion, and a 30-day lock-in period is imposed on the remaining equity shares allotted to anchor investors under the anchor investor portion.
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