Emcure Pharmaceuticals files draft IPO papers with SEBI; plans to raise over Rs 1,100 crore

Emcure Pharmaceuticals Limited has filed its draft IPO (Initial Public Offering) papers with capital markets regulator SEBI. The company is looking to raise more than Rs 1,100 crore through the public issue which will include a fresh issue of equity shares upto Rs 1,100 crore and an offer for sale (OFS) of 18,168,356 equity shares by existing shareholders, including promoters of the company. Overall the issue size would be higher than Rs 1,100 crore. In terms of sales, Emcure Pharmaceuticals is the 12th largest pharmaceutical company in India. The company is engaged in developing, manufacturing and marketing a broad range of pharmaceutical products across several geographies and has a presence in 70 markets globally.

Emcure Pharmaceuticals’ IPO will include a fresh issue of equity shares worth Rs 1,100 crore and an OFS by existing shareholders. Promoters of the company, Satish Mehta and Sunil Mehta will sell 20.30 lakh and 2.5 lakh shares, respectively through the IPO while BC Investments IV Limited, an arm of American private investment firm Bain Capital will sell 99.5 lakh shares. Emcure may consider a pre-IPO placement ahead of the IPO, which will see the size of the fresh issue getting trimmed by as much as Rs 200 crore. Ahead of the offer, the promoters of the company hold a collective 48.05% stake in the company. BC Investments own 13.09% of the total pre-Offer paid-up Equity Share capital.

According to the DRHP, the company plans to use Rs 947 crore from the fresh issue to Prepayment or scheduled repayment of all or a portion of certain outstanding borrowings availed by Emcure Pharmaceuticals. The remaining will be used for general corporate purposes. Further, the DRHP showed that Satish Mehta and Sunil Mehta, the promoters of the company, acquired shares of the company at the average cost of Rs 11.03 per share and Rs 7.59 per share, respectively. BC Investments, on the other hand, has acquired the shares held by it at the average cost of Rs 157.74 per share.

Emcure Pharmaceuticals made a profit of Rs 418.5 crore during the previous financial year and generated a revenue of Rs 6,091 crore. The company has been making a profit for the last three financial years. The IPO of Emcure will have 50% of the issue reserved for Qualified Institutional Buyers (QIB) while not less than 15% will be kept for Non-Institutional Investors (NII). Retail investors will get 35% of the entire issue to bid on. 

Upon listing, Emcure Pharmaceuticals will join peers such as Abbott India, Alkem Laboratories, Biocon Limited, Cipla, Dr Reddy’s Laboratories, and Torrent Pharmaceuticals.