The Rs 582.11 crore-initial public offering (IPO) of Senores Pharmaceuticals opens for bidding today, that is on, Friday, December 20, which will close for subscription on Tuesday, December 24. The pharma company shall be offering its shares in the range of Rs 372-391. Investors can apply for a minimum 38 equity shares and its multiples thereafter.
Senores Pharmaceuticals develops and manufactures a range of pharmaceutical products primarily for the regulated markets of the US, Canada, and the UK, while also serving emerging markets. The IPO of Senores Pharmaceuticals includes a fresh share sale of Rs 500 crore and an offer-for-sale (OFS) of up to 21,00,000 equity shares by its promoters and existing shareholders.
The net proceeds from the fresh issue shall be utilized towards investment in various subsidiaries, repayment of certain borrowings of the company and its subsidiary, funding the working capital requirements, funding inorganic growth through acquisition and other strategic initiatives, and general corporate purposes.
Senores Pharmaceuticals mobilised Rs 260.6 crore from anchor investors by allocating 66.65 lakh shares at Rs 391 apiece. Goldman Sachs, Societe Generale, Beacon Stone Capital, LC Pharos Multi Strategy Fund, Integrated Global Strategies, and Fortune Hands Growth Fund also bought shares in the anchor book.
Ahmedabad-based Senores Pharmaceuticals has launched 55 products in key therapeutic areas, including antibiotics and anti-fungal treatments, as of September 30, 2024. They have established partnerships with distributors and hospitals across several states in India. It operates in emerging markets across 43 countries and manufactures critical care injectables and APIs.
For the six months ended on September 30, 2024, Senores Pharmaceuticals reported a net profit of Rs 23.94 crore with a revenue of Rs 183.35 crore. It has reserved 75 per cent of the net offer for qualified institutional bidders (QIBs), while non institutional investors (NIIs) will get 15 per cent of the allotment. Retail investors will get 10 per cent of allocation.
Equirus Capital, Ambit and Nuvama Wealth Management are the book running lead managers of the Senores Pharmaceuticals IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with December 30 as the date of listing. Here's what a host of brokerage firms said about the IPO Senores Pharmaceuticals:
Canara Bank Securities Rating: Subscribe Despite these challenges, Senores demonstrates superior financial performance with a return on equity (RoE) of 23.6 per cent, significantly surpassing the listed peer average of 16.96 per cent. Its valuation is relatively favourable, trading at a P/E ratio of 28 times based on FY24 earnings, compared to the listed peer average P/E of 31 times, said Canara Bank Securities.
"Future growth is anchored in Senores' expanding product pipeline and strategic market entry into mid-tier regions such as the EU, Australia, and Latin America, positioning the company for continued revenue diversification and margin expansion. We recommend 'subscribe' to this issue for listing & long-term gains," it added.
Anand Rathi Research Rating: Subscribe Senores Pharmaceuticals develops and manufactures a range of pharmaceutical products primarily for the regulated markets of the US, Canada, and the UK, while also serving emerging markets. With a presence in 43 countries, the company focuses on critical care injectables, APIs, and complex specialty pharmaceutical products, said Anand Rathi Research.
"At the upper price band, the company is valued at P/E of 55 times with a market cap of Rs 1,800.6 crore post issue of equity shares and return on net worth of 23.6 times based on FY24. On the valuation front, we believe that the company is fairly priced. Therefore, we recommend a 'subscribe' rating to the IPO," it said.
SBI Securities Rating: Subscribe for long term Senores Pharma is valued at FY24 P/E and EV/EBITDA multiples of 57.2 times and 36.8 times, respectively, based on the upper price band on the post-issue capital. Ot has delivered a robust Revenue/EBITDA/PAT CAGR of 289.1 per cent/361.6 per cent/474.5 per cent between FY22 and FY24 to Rs 215 crore/ Rs 42 crore / Rs 31 crore respectively, said SBI Securities.
"Compared with its close peers, the issue seems fairly valued across different valuation and financial parameters. We recommend investors to subscribe to the issue at the Cut-Off price for a long term investment perspective," it added.
StoxBox Rating: Subscribe Senores Pharmaceuticals' financial performance is driven by leveraging its leadership position in key therapeutic areas, established presence in regulated markets, inorganic growth through synergistic acquisitions, niche product portfolios built in a short span in emerging markets, and robust R&D capabilities, all of which have supported strong growth, said StoxBox.
"The issue is valued at a P/E of 32 times on the upper price band based on FY24 earnings, which is deemed fair. Therefore, we recommend a 'subscribe' rating for the issue," it added.
Aditya Birla Money Rating: Subscribe The company plans to use Rs 500 crore for debt repayment & funding capex & WC requirements in its subsidiaries in the form of debt, said Aditya Birla Money. "Although fairly priced, we see robust growth in the business with scope of improvement in profitability, hence we recommend 'subscribe' to the IPO," it added.