Can you tell me about the IPO of Emcure Pharma?

Emcure Pharma has got the SEBI observations on its DRHP filed for the IPO 3 months back. IN SEBI lingo, observations on a DRHP means that the issue has been approved and the company can now go ahead with the IPO. Emcure Pharma is expected to target the IPO market around the first half of February 2022. What is interesting is that this will be one of the biggest IPOs in recent times since Gland Pharma.

The Emcure IPO would be worth Rs.5,000 crore comprising of a fresh issue of Rs.1,100 crore and Rs.3,900 crore as an offer for sale (OFS). The promoter family of Satish Mehta and Sunil Mehta holds 48.05% and partially will be monetizing part of their stake. Other promoters holding 33.5% collectively will also offer shares in the IPO. PE investors in Emcure, Bain Capital, owns 13.09% in Emcure Pharma and they will look at partial exit in the OFS.

The fresh issue of Rs.1,100 crore will be used to reduce total debt of Rs.1,253 crore and out of the fresh issue proceeds, nearly Rs.947 crore will be allocated to debt reduction. This will help the company deleverage its balance sheet. Emcure Pharma, based out of Pune, is a market leader in HIV Antivirals, Gynaecology and blood related therapeutic products.

Emcure currently services more than 70 countries across the world, apart from a strong India franchise. Emcure reported revenues of Rs.6,092 crore for FY21 while net profits were at Rs.419 crore. Emcure has 5 R&D facilities in India and owns a total of 161 patents with 98 patent applications pending in various countries. The price and the dates for the IPO are yet to be finalized.