Emcure Pharma IPO Debuts With 31% Premium

The initial public offering (IPO) of Emcure Pharma kicked-off its equity market journey with an over 31 per cent premium. The IPO listed on the National Stock Exchange (NSE) at Rs 1,325 against its issue of Rs 1,008. 

The Rs 1,952 IPO consisted of fresh issues of up to Rs 800 crore and an offer-for-sale (OFS) worth Rs 1,152 crore by promoter and investor selling shareholders with the price band for the issue being fixed at Rs 960 to 1,008. 

During the subscription phase, the issue received massive response from qualified institutions with the subscription of nearly 200 times. However, the retail subscription remained muted with only 7.36 times, while overall issue was subscribed 67.87 times. 

Exits And Returns

In the OFS, Namita Thapar also off-loaded her part of holding. Currently Thapar holds 63,39,800 shares or 3.5 per cent stake in the firm, out of which she will off-loaded 12,68,600 shares.

Notably, Thapar made 293 times returns on the upper price band of Rs 1,008. Her weighted cost of acquisition of the Emcure shares is around Rs 3.44 with a total investment of Rs 2.18 crore.  

With a 41.85 per cent stake in the company, Satish Ramanlal Mehta also participated in the OFS by giving up to 4,20,000 equity shares. He currently owns 75,816,748 equity shares. Mehta made profit 52 times on the upper band of Rs 1,008.

Analyst Advice 

“Emcure plans to enter the domestic market, particularly in rural areas, they have also increased their sales force over the last two years to expand their geographical presence. Emcure's financial performance is driven by leveraging its leadership position in key therapeutic areas, established presence in international markets, proven track record in building brands, higher entry barriers, focus on R&D and strong manufacturing capabilities. Hence, we advise the market participants to ‘hold’ the shares from a medium to long-term perspective,” said Prathamesh Masdekar, Research Analyst, StoxBox. 

IPO Objectives

The proceeds of Rs 800 crore from the fresh issue will be utilised for prepayment or scheduled repayment of a portion of certain outstanding borrowings availed by the company and general corporate purposes.

Additionally, the firm will also get benefits on listing in the public market which will enhance the brand’s visibility and provide liquidity to the shareholders. 

Firm’s Financials

The firm registered revenue of Rs 6,715 crore in FY24, compared to Rs 6,031 crore in FY23. 

The firm’s profit after tax (PAT) decreased to Rs 527 crore in FY23 compared to Rs 561 crore in FY22. 

Overall, revenue increased by 11.33 per cent, whereas PAT declined by 6.1 per cent.