Akum Drugs and Pharmaceuticals Limited IPO: Important things to know

Akum Drugs and Pharmaceuticals Limited filed a DRHP and will be coming up with its public issue in the upcoming time; the public issue will be offering a 100% book-built offer. This upcoming IPO is offering a fresh issue worth up to Rs 680 Crore of equity shares and an OFS of up to 18,598,365. The face value is reported as Rs. 2 for each share. This new IPO issue is being made through the book-building process with a reservation of not more than 50% of the new offer reserved for Qualified Institutional Investors, not less than 15% reserved for NII and the remaining 35% or more reserved for Retail Individuals. So, when will the IPO come? The Application for public issue and subscription opening/closing dates and other important dates will be declared soon. At the same time, the first cry price band will be declared soon.

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About the Company

The company was founded in 2004 as a pharmaceutical contract development and manufacturing organisation (CDMO) for a variety of drugs in India and abroad. Other services include developing the formulation, research and development (R&D), regulatory dossier preparation and filing in Indian and global markets, among other testing services. In addition to its core CDMO business, it is also involved in the manufacture and sale of branded pharmaceutical formulations and active pharmaceutical ingredients (APIs). They are the largest CDMO focused on India in terms of revenue and production capacity and clients served during FY 2023 (amongst CDMOs assessed by F&S) (Source: F&S Report). Their market share increased from 26.7% at the end of FY2021 to 29.4% by value for CY-2023(Source: F&S Report).

Objectives of the Public Offering

The company said they utilise the Net Proceeds towards funding the repayment or prepayment of indebtedness of the company and its Subsidiaries, funding incremental working capital requirements of the company, and pursuing inorganic growth initiatives through acquisitions and general corporate purposes. The amount to be utilised for general corporate purposes and achieving inorganic growth through acquisitions shall not exceed 35% of the Gross Proceeds. The amount to be utilised for general corporate purposes alone shall not exceed 25% of the Gross Proceeds.

Financials of the Company

For the period of March 2023, the company's assets increased to Rs 1,878.87 crore from Rs 1,864.06 crore compared to March 2022, showing a growth of 0.8%. Revenue for the FY23 was Rs 3,654.82 crore, showing a slight decrease of 0.5% from Rs 3,671.89 crore in the previous year. The profit after tax increased to Rs 97.82 crore from a loss of Rs 250.87 crore in the previous year. Whereas total borrowing increased to Rs 536.97 crore from Rs 357.95 crore, we can see an increase of 50% in borrowings.

Key Performance Indicators

Key performance indicators of the company reported a return on net worth of 13.23% and a profit after-tax margin of 2.64 %. Keep in mind the stats for the fiscal year that ended March 2023. If we look at the EBITDA margin, it is reported as 10.38% for the same FY.

Lead manager(s), Registrar of IPO & Promoters of the Company

The IPO is managed by ICICI Securities Limited, Citigroup Global Markets India Private Limited, Axis Capital Limited and Ambit Private Limited, which is the book-running lead manager of this public issue. Link Intime India Private Limited has been appointed as the registrar for the issue, while the company promoters are Sanjeev Jain, Sandeep Jain, and Akums Master Trust.

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