Introduction:
Glenmark Life Sciences is a wholly-owned subsidiary of Glenmark Pharmaceuticals Ltd. Incorporated in 2011 and is situated in Maharashtra, India. Glenmark Life Sciences IPO is in news these days because it is open for a subscription (Initial Public Offering) from 27th July 2021 till 30th July 2021.
About the company:
The company is responsible for manufacturing and supplying high-quality APIs for gastrointestinal disorders, cardiovascular disease, pain management, and diabetes, anti-infectives, central nervous system disease and other therapeutic areas. The revenues it has generated in India in the last two years have grown at 71.62%. While revenues generated internationally since 2019 have grown at 25.61%.The major competitors of the Glenmark Life sciences IPO within the API market contain Laurus Labs, Divis Labs, Shilpa Medicare, Aarti Drugs, and Solara Active Pharma Sciences.
What are its objectives for raising an IPO?
- Paying off outstanding purchase considerations
- For funding capital expenditures
- Geographic expansion
- Growth in API and CDMO business
Financial highlights:
- Sales that are the total revenues stands at Rs 1885.98 crore for FY21
- PAT of FY21 is Rs 351.58 crore
- Net margin dropped to 18.64% from 20%. in FY21
- The debt to equity ratio is 1.27 times.
- Return on net worth is 46.71% for 2021.
- Net cash generated from operations was for FY 21 is Rs 388.11crore, for FY20 is Rs 195.01 crore, and FY19 is Rs 10.35 crore.
- Earnings Per Share is around Rs.32.61
- The price/earnings ratio is about 21.31 – 22.08
- Net Asset Value stands at Rs.69.82 per share
Fresh equity shares up to a total of Rs 1,060 crore will be issued. Under this public issue, the issue particularly includes an offer for the sale of 63 lakh equity shares by Glenmark Pharma. In this way, a total of Rs 1,513.6 crore will be available at the upper level of the price range under the SME IPO. The company had planned to issue fresh equity for Rs. 1160 cr but then the issue size got reduced to Rs. 1060 cr. Even to the astonishment of investors, the shareholder quota was totally skipped. It then was termed as investor unfriendly move as it sent wrong signals in the primary market. The equity trading of the corporate is going to be listed on BSE and NSE. Glenmark shares are available at a premium of ₹300 within the grey market, that's from the difficulty price of ₹695 to ₹720 about 40 per cent higher. GMP is very volatile because the Glenmark shares were available within the grey market at a premium of ₹200 to ₹205. So, the share market trading is predicted to reply strongly to the public issue.
Strengths:
- Strong growth in top-line, bottom-line expansion
- Strong margins
- It has a great financial performance track record and it provides return ratios
- It holds leadership in APIs and has a strong relationship with global generic companies.
- High-quality product manufacturing.
IPO Details:
- Glenmark Life Sciences IPO details
- Subscription Dates:27 – 29 July 2021
- Price Band: INR695 – 720 per share
- Fresh issue: INR1,060 crore
- Offer For Sale: 63,00,000 shares (INR437.85 – 453.60 crore)
- Total IPO size: INR1,497.85 – 1,513.6 crore
- Minimum bid (lot size): 20 shares
- Face Value: INR2 per share
- Retail Allocation: 35%
- Listing On: NSE, BSE
Whom to Invest and How Much to Invest
The reservation was kept in the following manner half of the total issue is for qualified institutional buyers, 35 per cent is kept for retail investors, and the remaining 15 per cent is for non-institutional investors. Glenmark Life Sciences has reduced its IPO size as compared to earlier. Also, if you want to invest in it, then at least 14 to 15 thousand will have to be spent. The company has made a lot of 20 shares. A person can buy at most 13 lots. The company will pay its expenses and borrow from the money earned from this IPO.
Conclusion:
Grey market observers are attracted by Glenmark shares. API business is expected to reach USD 306 bn by the year 2027 due to the coronavirus. The second reason being we are becoming independent as of now in China so we don’t plan to export drugs from China. The issue when compared to its peers is reasonably priced in terms of price to its earnings ratio. Hence, we recommend subscribing to the IPO.
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