Gland Pharma IPO

Gland Pharma IPO

Gland Pharma is coming out with an IPO on November 09, 2020. Here is a detailed study about the company and everything you need to know about the IPO.

In this Blog: ·       IPO details ·       Timetable ·       About the Company ·       Objectives of the offer ·       Risks Involved ·       Financials of Company ·       Grey Market Premium       ·       Disclaimer

 

IPO Details

IPO Date	09th Nov 2020 to 11th Nov 2020
Issue Size	Rs. 6459.55 Crores
Fresh Issue	Rs. 1250 Crores (remaining offer for sale)
Face Value	Rs. 1 per Equity Share
Price Band	Rs. 1490 – Rs. 1500 per Equity Share
Market Lot	10 Shares and in multiple of 10 thereafter
Minimum Amount	Rs. 14,900 – Rs. 15,000
Listing	BSE & NSE

 

Timetable

Issue Opens	09th Nov 2020
Issue Closing	11th Nov 2020
Allotment Finalization	17th Nov 2020
Initiation of Refund	18th Nov 2020
Credit of Share in Demat a/c	19th Nov 2020
Listing Date	20th Nov 2020

 

About the Company

Incorporated in 1978, Gland Pharma is a Subsidiary company (74%) of Chinese Pharma Giant Shangai Fosun Pharma. The company formed by PVN Raju in 1978 found a big stakeholder in the form of Fosun Pharma of China that acquired 74% stake in October 2017. Thereafter, the company marked tremendous growth in top and bottom line till FY20. However, ever since COVID-19 pandemic, China is facing a trade war and boycott from the world over and thus this company with major China stake is at the centre stage for the Indian capital market. It is one the largest and fastest growing injectable focused companies in United States. It sells its products primarily under a business to business (“B2B”) model in over 60 countries as of March 31, 2020, including the United States, Europe, Canada, Australia, India and the Rest of the world. It has a professional management team and its Promoters, Shanghai Fosun Pharma, is a global pharmaceutical major. This is the biggest ever IPO in pharma sector for Indian capital market history so far.

The following are the strengths of the company:
• Extensive and vertically integrated injectables manufacturing capabilities with a consistent regulatory compliance track record
• Diversified B2B-led model across markets, complemented by a targeted B2C model in India
• Extensive portfolio of complex products supported by internal R&D and regulatory capabilities
• Track record of growth and profitability from a diversified revenue base with healthy cash flows

 

Objectives of the Offer

The offer comprises of Offer for Sale (OFS) and Fresh Issue.

The Company proposes to utilise the Net Proceeds towards funding of the following main objects:
1. Funding incremental working capital requirements of our Company;
2. Funding capital expenditure requirements of our Company

 

Risks Involved

·       The injectables pharmaceutical market is highly competitive, both globally and domestically, and if the company is unable to compete successfully against existing or new competitors, its revenues could decline and its future profitability could be affected.

·       Countries world-wide have started cutting their business deals with China, it would be a major concern for the future outlook of this pharma company.

·       In 2020, 66.7% of its operational revenue came from the United States. If there are any changes in the trade relations or any change in the business relationships of the company, then, the revenue sources will be affected significantly.

·       There are several outstanding taxations and regulatory cases against the company and its promoters. The total amount involved is Rs. 9.25 crores.

 

Financials of Company

The table below summarizes the key financial figures of Gland Pharma from 2017 to 2020. The figures below are in Rs. Crores.

Year	2020	2019	2018	2017
Total Revenue	2772	2130	1672	1525
Total Expenses	1780	1423	1170	947
Total Assets	4086	3523	2928	2474
Profit after Tax	773	452	321	414
Net Cash Flow from Operating Activities	701	185	202	476
Long Term Debt	4	5	5	6

 

Grey Market Premium

Grey market premium as on today is ₹60-70.

(Do not subscribe for IPO by just seeing premium Price as it may change anytime before listing. Subscribe only considering Fundamental of the companies)

GMP is just for knowledge purpose. We at Market Brains do not support or execute grey market trades.

 

Disclaimer

Market Brains by HKD is not a registered investment, legal or tax advisor or a broker/dealer. All Investment / Financial opinions expressed by Market Brains are from personal research of the owner of the Blog and based upon information obtained in good-faith from sources believed to be reliable. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.

Before you invest, ensure that you read through the company’s financials and the Red Herring Prospectus (RHP) carefully.

Happy Investing!