Emcure Pharma IPO subscribed 33 times on Day 3 so far; QIBs lead bidders

The initial public offering (IPO) of Emcure Pharmaceutical saw a strong response from the investors during the third and final day of the bidding process. After being fully subscribed more than 5 times by the end of second day, the issue managed to see a bumper response from the institutional bidders.
 

The Pune-based Emcure Pharmaceuticals is selling its shares in the price band of Rs 960-1008 apiece. Investors can apply for a minimum of 14 shares and its multiples thereafter. It is looking to raise Rs 1,952.03 crore via IPO, which includes a fresh share sale of Rs 800 crore and an offer-for-sale (OFS) of 1,14,28,839 equity shares.
 

According to the data, the investors made bids for 45,22,99,484 equity shares, or 33.09 times, compared to the 1,37,03,538 equity shares offered for the subscription by 2.45 pm on Friday, July 05. The three-day bidding for the issue, which opened on Wednesday, July 3, concludes today.
 

The allocation for qualified institutional bidders (QIBs) was subscribed 77.45 times, while the portion reserved for non-institutional investors saw a subscription of 39.81 times. However, the quota set aside for employees attracted bids for 7.81 times of their reservation, while retail investors quota was booked 6.19 times as of the same time.
 

Emcure Pharmaceuticals, which was incorporated in 1981, is a homegrown pharmaceutical company which develops, manufactures, and globally markets a wide range of pharmaceutical products across several major therapeutic areas. Emcure Pharmaceuticals has 13 manufacturing facilities in India.
 

The grey market premium of Emcure Pharma has remained firm after the strong bidding. Last heard, the company was commanding a premium of Rs 350 in the unofficial market, suggesting a listing pop of about 35 per cent for the investors. However, the premium in the grey market stood around Rs 330 levels, a day ago.
 

Brokerage firms are mostly positive on the issue suggesting investors to subscribe to it on the back of strong business model, long experience of management, robust market share, plans to reduce debt, reasonable price and positive growth outlook in India and global markets. However, quality risks, regulatory concerns and supply chain disruptions are the key risks for the issue.
 

Emcure Pharma has raised Rs 582.6 crore via an anchor book as it allocated 57,79,850 shares to anchor investors at Rs 1,008 apiece. Pune-based Emcure Pharma reported a net profit of Rs 527.58 crore with a revenue of Rs 6,715.24 crore for the financial year 2023-24. The company's net profit came in at Rs 561.85 crore with a revenue of Rs 6,031.72 crore for FY23.
 

Emcure Pharma is amongst the largest pharmaceutical companies in India with large, diversified and fast-growing product portfolio with strong focus in the women’s healthcare market, Extensive and diversified manufacturing capacity, well-positioned into the domestic market, and strong R&D capabilities, Emcure is a good portfolio pick, said Mahesh Ojha, AVP Research at Hensex Securities with a 'subscribe' rating.
 

Emcure Pharma has reserved 1,08,900 shares for the eligible employees of the company, who will get a discount of Rs 90 per share. It has reserved 50 per cent of the issue for the qualified institutional bidders (QIBs), while non-institutional investors have 15 per cent of the net offer. Remaining 35 per cent of the net offer shall be allocated towards retail investors.
 

"Emcure Pharma is valued at FY24 P/E multiple of 36.1 times. The company has a strong domestic presence with leadership positions across key brands. Increased geographic penetration will help to grow the company’s topline, while debt reduction from proceeds of the issue will augment profitability," said SBICap Securities, with a 'subscribe' rating for the issue.
 

Axis Capital, Kotak Mahindra Capital, JP Morgan India and Jefferies India are the book running lead managers of the Emcure Pharma IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE with Wednesday, July 10 as the tentative date of listing.

 

 

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.