Can you give me more details of the forthcoming IPO of Macleods Pharma?

A full year and half after the mega IPO of Gland Pharma, it looks like Macleods is readying for another mega pharma push. The company will tap the IPO market with a Rs.5,000 crore issue which will be entirely an offer for sale by the promoters. Currently, promoters hold 100% in the company. Macleods Pharma is the seventh largest pharma company in India by top line sales and also one of the most profitable with profit margins of 29%.

The promoters will be selling a total of 60.48 million shares via a 100% offer for sale. There will be no fresh issue component so no fresh funds are coming in and there is no dilution of equity also. The main purpose of the IPO is to give an exit to the promoters but also to enable the listing of the company on the bourses. This is expected to provide a basis of rationale for stock valuation so the company can use stock as currency for inorganic growth.

Macleods Pharma was established nearly 32 years back in the year 1989. Till date, the company has funded its growth organically. For fiscal FY21, Macleods Pharma reported total revenues of Rs.7,750 crore and net profits of Rs.2,023 crore implying net profit margins of 26% with EBITDA margins of over 29%. The IPO will be lead managed by Kotak Mahindra Capital, Citigroup, Edelweiss Financial Services, ICICI Securities and Nomura Financial.

Macleod Pharma is into anti-infectives, cardiovascular, anti-diabetic, dermatology and hormone treatment products. Macleods Pharma ranks seventh by sales and is driven by domestic sales more than export sales. Its branded generics account for 51.73% of total revenues with non-metros accounting for 80% of domestic sales. It has global presence in North America, Europe, Africa, Asia, South America, and the CIS.