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Akums Drugs & Pharmaceuticals Limited: IPO Overview
Company Details
Akums Drugs & Pharmaceuticals Limited, a prominent player in the Contract Development and Manufacturing Organization (CDMO) sector, is set to launch its Initial Public Offering (IPO) to raise approximately ₹1856.74 crores. The IPO will be listed on both BSE and NSE, with the price band set between ₹646 to ₹679 per equity share.
Key Dates
| Event | Date |
|---|---|
| IPO Opening Date | July 30, 2024 |
| IPO Closing Date | August 1, 2024 |
| Allotment Date | August 2, 2024 |
| Refunds Initiation | August 5, 2024 |
| Credit to Demat Accounts | August 5, 2024 |
| Listing Date | August 6, 2024 |
IPO Details
| Details | Figures |
|---|---|
| Issue Size | ₹1856.74 crores |
| Fresh Issue | ₹680 crores |
| Offer for Sale | ₹1262.83 crores |
| Market Lot | Minimum 22 shares (₹14,938) |
| Market Lot | Maximum 286 shares (₹194,194) |
| Qualified Institutional Buyers (QIB) | 75% |
| Non-Institutional Investors (NII) | 15% |
| Retail Individual Investors (RII) | 10% |
Use of Proceeds
The capital raised from the IPO will be allocated for:
- Repayment or prepayment of indebtedness: A portion of the funds will be used to reduce the company’s debt, thereby strengthening its balance sheet and improving financial stability.
- Funding incremental working capital requirements: The company aims to use part of the proceeds to support its growing operational needs, ensuring smooth business operations and future expansion.
- Pursuing inorganic growth initiatives through acquisitions: The company plans to explore strategic acquisitions to enhance its market position and expand its service offerings.
- General corporate purposes: Remaining funds will be used for other general business needs, which might include infrastructure enhancement, technology upgrades, and other corporate expenses.
Financial Performance
The financial performance of Akums Drugs & Pharmaceuticals Limited over the past few years highlights its market presence and operational capabilities. Here’s a snapshot of the key financial metrics:
| Metric | FY 2024 | FY 2023 |
|---|---|---|
| Revenue | ₹4,212.21 crores | ₹3,701.29 crores |
| Growth | 13.81% | 10.54% |
| Profit After Tax (PAT) | ₹0.79 crores | ₹97.82 crores |
| Net Worth | ₹709.50 crores | ₹708.71 crores |
The significant drop in PAT in FY 2024 raises some concerns and suggests that potential investors should scrutinize the underlying causes. Despite the revenue growth, the net profit margins have been impacted, which might be due to increased operational costs or other financial pressures.
Valuation Metrics
| Metric | Value |
|---|---|
| Market Capitalization | ₹10,681.67 crores |
| Price-to-Earnings (P/E) Ratio | 29.79 based on FY 2024 earnings |
| Debt-to-Equity Ratio | 0.69 |
These metrics indicate that the company is moderately leveraged and has a reasonable valuation based on its earnings. The P/E ratio suggests that the stock is priced at a premium, which is common for companies with strong growth prospects in the CDMO sector.
Company Profile
Akums Drugs & Pharmaceuticals Limited is renowned for its extensive CDMO services, catering to numerous domestic and global pharma companies. The company boasts 16,463 employees and operates several production facilities accredited by major global regulatory bodies such as EU-GMP, WHO-GMP, and US NSF.
| Aspect | Detail |
|---|---|
| Number of Employees | 16,463 |
| Production Facilities | Multiple, globally accredited |
| Regulatory Accreditations | EU-GMP, WHO-GMP, US NSF |
With a robust workforce and state-of-the-art facilities, Akums is well-positioned to leverage its capabilities to meet the increasing demand for pharmaceutical products and services.
Investment Considerations
While Akums Drugs & Pharmaceuticals Limited enjoys a strong position in the CDMO market, potential investors should consider the recent financial performance, particularly the sharp decline in PAT. The IPO is fully priced, and investments might be more suitable for medium to long-term holding.
Pros:
- Strong Market Position: Akums is a leading player in the CDMO market, catering to both domestic and international clients.
- Growth Potential: The company’s expansion plans and strategic acquisitions can drive future growth.
- Accredited Facilities: Multiple global accreditations enhance the company’s credibility and market reach.
Cons:
- Declining Profit Margins: The significant drop in PAT raises concerns about profitability.
- High Valuation: The P/E ratio indicates that the stock is priced at a premium, which might not appeal to value investors.
How to Apply
- Investors can apply through various platforms such as ASBA (Application Supported by Blocked Amount) via their bank accounts, or through stockbrokers using platforms like Zerodha, Upstox, and Paytm Money.
Steps to Apply via ASBA:
- Log in to your net banking account.
- Navigate to the ASBA section and select the Akums Drugs IPO.
- Enter the number of shares and bid price.
- Submit the application and ensure the required amount is blocked in your account.
Steps to Apply via Brokers:
- For more detailed information, you can visit the official IPO pages on platforms like Chittorgarh, Finology, and IPO Watch.