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Emcure Pharmaceuticals limited to raise Rs 4,500 crore – Rs 5,000 crore through an initial public offering, this issue comprises a fresh issue of equity shares worth Rs 1,100 crore and an offer for sale of 18,168,356 shares by its promoter and existing shareholders.

About Company

Emcure Pharmaceuticals is one of the leading Indian pharmaceutical companies engaged in developing, manufacturing and globally marketing a broad range of pharmaceutical products across several major therapeutic areas. Emcure has ranked as the 12th largest pharmaceutical company in India and the largest pharmaceutical company in India in the gynecology (with 11.85% Indian market share), blood related (with 10.26% Indian market share) and HIV antiviral therapeutic areas (with 51.43% Indian market share), based on sales in India in the financial year 2021, according to CRISIL. Emcure Pharmaceuticals is an R&D driven company with a differentiated product portfolio that includes orals, injectables and biologics, as well as an mRNA platform through which company is currently developing a COVID-19 vaccine that has enabled company to reach a range of target markets across over 70 countries with a strong presence in Europe and Canada.

Emcure Pharmaceutical’s market share-

According to the report of CRISIL, company is present in 19 therapeutic areas.

Gynecology- Emcure's gynecology portfolio includes Hematinics and Iron combinations, Progestogen and similar combinations. Its key brands in the gynecology therapeutic area include Orofer-XT, Orofer-FCM, Orofer-S, Ferium, Feronia, Galact, and Emprogest.

Blood Related- Its blood-related portfolio includes antifibrinolytics and Erythropoietin. Emcure's key brands in the blood-related therapeutic area include Pause, Vintor, Sylate, and Eporise.

HIV Antivirals- Emcure's HIV portfolio comprises antiretrovirals. Their key brands in the HIV antivirals therapeutic area include Spegra, Instgra, Vonavir, Viropil, and Atazor-R.

Industry Overview

The global pharmaceutical market has grown at a CAGR of around 4.5% to 5% from approximately USD 1,090 billion in the year 2016 to approximately USD 1,270 billion in the year 2020. It is expected to sustain this growth over the next five years to reach approximately USD 1,650 to USD 1,700 billion in the year 2026.

Indian Pharmaceutical market is expected to reach USD 65 billion by 2024, and approximately USD 120-130 billion by 2030 from USD 42 billion in 2021.

New product launches, widespread population aging and sedentary lifestyles leading to increased chronic disease prevalence, technological advances, new methods for drug discovery, and an increase in pharmaceutical drug usage have been some of the key growth drivers for the industry.

Financials of the Company

Emcure Pharmaceuticals is having a good financial-

                                                                                                                                    All amounts is in INR crore

Peers of the Company

Company is having strong listed peers; here is the comparison of Emcure with its 3 of listed peers-

Strengths of the Company

• Emcure Pharmaceuticals is the leading Pharmaceutical Company in India in gynecology, Blood related and HIV antiviral therapeutic areas. Company’s sales in India of chronic products grew at a CAGR of 13.86%
• Company has established international market presence, company sells its products over 70+ countries
• Company is having good financials.
• Strong R&D Capabilities Driving Differentiated Portfolio of Products Demonstrated Capabilities of Building Brands
• Extensive and Diversified Manufacturing Capacity- Emcure has 14 manufacturing facilities (Maharashtra, Gujarat, Sikkim, Karnataka and Jammu) across India and company intending to increase its facilities and capacities of manufacturing.
• De-Risked Business Model with Diversified Income Base- For the Financial Years 2019, 2020 and 2021, company's sales in India contributed to 59.28%, 57.98% and 49.87%, respectively in revenue from operations, and in the same period company's sales outside India contributed to 40.72%, 42.02% and 50.13%, respectively in revenue from operations
• Highly Qualified, Experienced and Entrepreneurial Management Team and Board

Risk Factors

• Any delay, interruption or reduction in the supply or transportation of raw materials or finished products, or an increase in the costs of such raw materials and finished products, may affect the business and cash flows of the company.
• Company is having strong peers with strong profitability and strong hold in the market.
• The pharmaceutical industry is highly competitive.
• A slowdown or shutdown in manufacturing or R&D operations could adversely affect the business, financial condition and results of operations of the company.
• This Industry is subject to extensive government regulation; any failure on implementation of rules may affect the business of the company.

Objective of the IPO

• Company to use Rs 947.58 crore to pay Debt
• Few proceeds company will utilize for general corporate purposes.

My Observation

Considering all the aspects of the company, this IPO seems good to invest in. Investors are suggested to invest in this IPO for long term wealth creation; investor can also consider this IPO for listing gains. Emcure Pharmaceuticals is a profit making company and the industry in which it works has higher potential to grow in present and in future as well.