Emcure Pharmaceuticals Refiles IPO Papers with SEBI

18 Dec 2023 , 12:59 PM

Pune-based Emcure Pharmaceuticals has refiled its preliminary papers with the capital markets regulator SEBI for fundraising via an initial public offering (IPO). The IPO comprises a mix of fresh shares amounting to Rs 800 crore and an offer-for-sale (OFS) of 1.37 crore equity shares by existing shareholders, both of which are smaller in size compared to the company’s previous fundraising plan.

Promoters and promoter group members, including Satish Ramanlal Mehta and Sunil Rajanikant Mehta, are set to sell 49.85 lakh equity shares in the OFS, while investor BC Investments IV will offload 72.34 lakh equity shares, according to draft papers filed on December 16. Other stakeholders, such as Arunkumar Purshotamlal Khanna, Berjis Minoo Desai, and Sonali Sanjay Mehta, will also participate in the OFS.

Emcure Pharma had initially filed draft papers for its IPO in August 2021, outlining a fresh issue of Rs 1,100 crore and an OFS of 1.8 crore equity shares. The fundraising target was estimated to be in the range of Rs 4,500-5,000 crore, as per sources. Although the company received approval from SEBI to proceed with the IPO plans in December 2021, it did not launch the IPO at that time.

Subdued market conditions, coupled with underperformance in the pharma sector from October 2021 to March 2023, may have contributed to the delay. The company now aims to utilize the net fresh issue proceeds primarily for repaying debts totaling Rs 640 crore and for general corporate purposes. As of September 2023, Emcure’s total borrowings stood at Rs 2,012.9 crore.

Emcure, the 13th largest pharmaceutical company in India, operates globally, with a strong presence in India, Europe, and Canada. It is the fourth largest pharmaceutical company by market share in covered markets and holds the top position in gynecology and HIV antivirals therapeutic areas in India.

Emcure’s financial performance saw improvement in the current financial year after a weak performance in the last fiscal year. For the year ended March FY23, net profit declined by 20% to Rs 561.8 crore, with revenue from operations increasing by 2.2% to Rs 5,986 crore. However, for the six months ending September FY24, net profit surged by 31.3% to Rs 286.8 crore, and revenue rose by 15.3% to Rs 3,219.3 crore compared to the same period in the previous financial year.

Kotak Mahindra Capital Company, Axis Capital, Jefferies India, and JP Morgan India have been appointed as merchant bankers for the IPO.