Emcure Pharmaceuticals IPO: Day 1 Subscription Reaches 66% as Unlisted Market Premium Climbs

Emcure Pharmaceuticals’ IPO, which launched today, has seen 66% subscription so far, mainly due to strong interest from non-institutional investors (NII).

The IPO, closing on July 5, was 83% subscribed by retail investors and 1.07 times by NIIs. However, there have been no bids from qualified institutional buyers (QIBs) yet.

Before the IPO opened, Emcure raised ₹582 crore from anchor investors, including big names like HDFC Mutual Fund, ICICI Prudential Mutual Fund, SBI Mutual Fund, Abu Dhabi Investment Authority, Goldman Sachs Asset Management, Nomura, and HDFC Life.

IPO Structure

The IPO consists of a fresh issue of equity shares worth ₹800 crore and an offer for sale (OFS) of 1.14 crore shares by promoters and existing shareholders. Notably, Namita Thapar, known from Shark Tank, is set to earn around ₹127 crore through the OFS.

Emcure Pharmaceuticals IPO GMP

In the grey market, Emcure’s shares are trading at a premium of ₹295, slightly higher than the previous day.

IPO Review

Emcure Pharmaceuticals develops, manufactures, and markets a wide range of pharmaceutical products across major therapeutic areas globally.

Analysts see potential for business growth due to favourable industry trends and the company’s scalability. “At the upper price band, the company is fairly priced with a post-issue P/E of 36x based on FY24 earnings. We recommend subscribing for long-term gains,” said Anand Rathi.

IPO Price Band

The IPO is priced between ₹960 and ₹1008 per share. Investors can bid for a minimum of 14 shares per lot. At the upper end, Emcure aims to raise ₹1952 crore.

Usage of Proceeds

The funds from the fresh issue will be used to pay off debt and for general corporate purposes.

Company Overview

Pune-based Emcure Pharmaceuticals specialises in developing, manufacturing, and globally marketing a diverse range of pharmaceutical products, including orals, injectables, and biotherapeutics. They operate in over 70 countries, including significant markets in India, Europe, and Canada.

Market Outlook

The global pharmaceutical market is expected to grow at a compound annual growth rate (CAGR) of about 5.0% to 5.5% from 2023 to 2028, reaching approximately $1,900 billion to $1,950 billion by 2028.

In FY24, Emcure’s revenue increased by 11% year-on-year to ₹6,658 crore from ₹5,985 crore. However, profit after tax fell by 6% to ₹527 crore from ₹562 crore.

Book-Running Lead Managers

Kotak Mahindra Capital Company, Jefferies India, Axis Capital, and JP Morgan India are the book-running lead managers for this IPO.