Emcure Pharma IPO: Significant GMP Surge as Subscription Opens on July 3

Emcure Pharmaceuticals, a prominent player in the Indian pharmaceutical sector, is poised to make a significant impact with its upcoming initial public offering (IPO). As the subscription period approaches, the company’s shares are witnessing a substantial premium in the grey market, reflecting investor anticipation and confidence.

Grey Market Premium (GMP) Surge

Ahead of the IPO opening for subscription on July 3, Emcure Pharmaceuticals’ shares are trading at a premium of ₹270 in the unlisted market as of June 29. The grey market, an unofficial platform where shares trade before official allotment, provides investors with a speculative glimpse of the listing price. The current GMP surge is a positive indicator of market sentiment towards Emcure’s public offering.

IPO Details

• Subscription Period: July 3 to July 5

• Price Band: ₹960 to ₹1,008 per share

• Lot Size: 14 equity shares and multiples thereof

At the higher end of the price range, Emcure aims to raise ₹1,951.04 crore. The IPO comprises a fresh issue of ₹800 crore and an offer-for-sale (OFS) of 1.14 crore equity shares by the promoters and existing shareholders.

Prominent Shareholders in OFS

Prominent shareholders participating in the OFS include:

• Satish Ramanlal Mehta

• Sunil Rajanikant Mehta

• Namita Vikas Thapar

• Samit Satish Mehta

• Pushpa Rajnikant Mehta

• Bhavana Satish Mehta

• Kamini Sunil Mehta

• BC Investments IV

• Arunkumar Purshotamlal Khanna

• Berjis Minoo Desai

• Sonali Sanjay Mehta

Allocation and Employee Reservation

The IPO has a structured allocation:

• Qualified Institutional Bidders (QIBs): 50%

• Non-Institutional Investors: 15%

• Retail Investors: 35%

Additionally, Emcure has reserved 1,08,900 shares for its eligible employees, offering a discount of ₹90 per share.

Utilization of IPO Proceeds

The funds raised through the fresh issue will be allocated towards the repayment or prepayment of certain outstanding borrowings and general corporate purposes. The proceeds from the OFS will go to the selling shareholders.

Competitive Landscape

Emcure Pharmaceuticals competes with notable industry players such as:

• Dr. Reddy’s Laboratories

• Cipla

• Alkem Laboratories

• Torrent Pharmaceuticals

• Mankind Pharma

• Abbott India

• JB Chemicals

Company Background and Financial Performance

Founded in 1981, Emcure Pharmaceuticals develops, manufactures, and markets a wide range of pharmaceutical products globally, spanning various therapeutic areas.

• Revenue Growth: 11.33% increase year-over-year

• Profit After Tax (PAT): Decreased by 6.1% from the previous fiscal year

• EBITDA: Rose by 4% to ₹1,229.7 crore

• EBITDA Margin: Dropped by 120 basis points to 18.5% in FY24

Key Managers and Listing Information

Kotak Mahindra Capital Company, Axis Capital, JP Morgan India, and Jefferies India are serving as the book-running lead managers for the issue. Link Intime India Is the designated registrar.

Emcure Pharmaceuticals’ equity shares are slated for listing on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on July 10, 2024.

In Conclusion, Emcure Pharmaceuticals’ IPO is a significant event in the Indian pharmaceutical industry, drawing attention from investors and market analysts alike. With a robust product portfolio, strategic utilization of IPO proceeds, and a well-defined allocation structure, Emcure is set to make a notable entry into the public market. Investors will keenly observe the company’s performance post-listing, as it competes with other major pharmaceutical giants.