Pharmaceutical CDMO Akums Drugs Files for ₹816 Crore IPO, Eyes Acquisitions

12 Feb 2024 , 10:32 AM

Akums Drugs and Pharmaceuticals Ltd has submitted draft papers to the Securities and Exchange Board of India (Sebi) to initiate an initial public offering (IPO) to raise capital. The IPO consists of a combination of fresh equity shares valued at ₹680 Crore and an offer-for-sale (OFS) of 1.86 Crore shares by promoters and an existing investor, as per the draft red herring prospectus (DRHP) filed on Saturday.

The individuals selling shares in the OFS include Sanjeev Jain, Sandeep Jain, and Ruby QC Investment Holdings Pte Ltd. The company, in collaboration with the Book Running Lead Managers (BRLMs), is contemplating a private placement option for up to 20% of the Fresh Issue or any other permissible amount under prevailing laws. This placement aims to gather cash consideration amounting to Rs. 136 crore before the funding of the Red Herring Prospectus with the Registrar of Companies (ROC). In the event of executing the pre-IPO placement, the minimum offer size, which includes the reduced fresh issue due to the pre-IPO placement and the offer for sale, must represent at least 10% of the post-offer paid-up Equity Share Capital of the company.

The proceeds from the fresh issue are earmarked for debt repayment, meeting working capital requirements, pursuing growth initiatives through acquisitions, and for general corporate purposes.

Established in 2004, Akums is a pharmaceutical contract development and manufacturing organization (CDMO) that offers a wide range of pharmaceutical products and services in India and abroad. As of September 30, 2023, key clients of the company include Alembic Pharmaceuticals, Alkem Laboratories, Cipla, Dabur India, Dr. Reddy’s Laboratories, Sun Pharmaceutical Industries, among others.

The IPO is being managed by ICICI Securities, Axis Capital, Citigroup Global Markets India, and Ambit Pvt Ltd as the lead managers.