Akums Drugs IPO Fully Booked on First Day: 10 Key Risks Investors Must Know Before Investing
Akums Drugs IPO: Akums Drugs and Pharmaceuticals Ltd.’s initial public offering (IPO) saw a huge demand from retail and non-institutional investors, getting fully booked on the first day of bidding. The public subscription period, which started on July 30, will end on August 1.
Akums Drugs IPO raised ₹829 crore from anchor investors just a day before the public subscription began. The price range for the IPO is set at ₹646 to ₹679 per share.
The IPO includes a fresh issue of equity shares worth ₹680 crore and an offer-for-sale (OFS) of 1.73 lakh shares, valued at ₹1,177 crore at the upper end of the price range, by the promoters and an existing investor.
Sandeep Jain, Ruby QC Investment Holdings Pte Ltd, and Sanjeev Jain are selling their shares in the OFS. The company has also reserved shares worth ₹15 crore for its employees in the public offering.
The money raised from the fresh issue will be used for general corporate purposes, paying off debt, meeting the company’s working capital needs, and pursuing growth through acquisitions.
The lead managers for the IPO are ICICI Securities, Axis Capital, Citigroup Global Markets India, and Ambit Pvt Ltd.
Here are 10 key risks listed by the company in its Red-Herring Prospectus (RHP):
- Dependency on Key Customers: A significant portion of revenue comes from a small number of customers.
- Regulatory Risks: The company is subject to various regulatory approvals and compliance requirements.
- Competition: The pharmaceutical market is highly competitive.
- Operational Risks: Any disruption in manufacturing or supply chain could impact business.
- Financial Performance: Past financial performance may not be indicative of future results.
- Debt Levels: High levels of debt could affect financial stability.
- Market Conditions: Economic and market conditions can influence business performance.
- R&D Costs: High costs associated with research and development may impact profitability.
- Litigation Risks: The company may face legal challenges that could affect its operations.
- Foreign Exchange Fluctuations: Changes in currency exchange rates could impact financial results.
These risks should be carefully considered before investing in the Akums Drugs IPO.
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