Emcure Pharma IPO to open on July 3: Check business model, competitors and other key details

Emcure Pharma IPO is set to open on Wednesday, July 3. The subscription window will remain open till July 5 (Friday). Emcure is a Pune-based pharmaceutical company. Shark Tank India fame Namita Thapar is the executive director of the company. The public issue is valued at ₹1,952.03 crore.

The book-building issue consists of a combination of a fresh issue of 79 lakh shares aggregating to ₹800 crore and an offer-for-sale (OFS) of 1.14 crore shares aimed at raising ₹1,152.03 crore. The promoters of the company are Satish Ramanlal Mehta, Sunil Rajanikant Mehta, Namita Vikas Thapar and Samit Satish Mehta.

Ahead of Emcure Pharma IPO subscription here’s a look at the business model, market share and key competitors of the company:

Emcure Pharma business model

Emcure Pharmaceuticals, incorporated in 1981, develops, manufactures and markets a diverse range of pharmaceutical products. The company has 13 manufacturing facilities located in India. The company is present in 70 countries across the globe. Emcure Pharma’s portfolio is focused towards pharmaceutical products used in chronic (including sub-chronic) therapeutic areas.

Emcure Pharma market share

According to the Red Herring Prospectus, Emcure Pharma was ranked as the 13th largest pharmaceutical company in India in terms of Domestic Sales for Moving Annual Total (MAT) in FY24 and the 4th largest pharmaceutical company by market share in the company’s covered markets in terms of domestic sales for MAT FY24.

The company also claims that, in terms of domestic sales for MAT FY24, it is the third largest pharmaceutical player in the gynaecology and human immunodeficiency virus (HIV) antivirals therapeutic segments in India.

The company also mentioned in its RHP that six of its brands were ranked among the 300 highest-selling brands in India, in terms of domestic sales for MAT FY24. As many as 26 brands of the company reported domestic sales of more than ₹50 crore for MAT FY24, compared to 13 brands for MAT FY20. The company also said that 16 of its top 20 brands were ranked among the three highest-selling brands in their respective therapeutic areas in India, in terms of domestic sales for MAT FY24.

Emcure Pharma: Key competitors

The company’s key competitors in India include leading industry players such as Dr Reddy’s Laboratories Ltd, Cipla, Alkem Laboratories, Torrent Pharmaceuticals, Mankind Pharma, Abbott India Ltd, and JB Chemicals & Pharmaceuticals. The company’s competitors in the international markets include regional companies and multinationals.

Emcure Pharma Financials

The pharmaceutical company’s revenue from operations for the fiscal year ended March 31, 2024, grew more than 11% to ₹6,658 crore against ₹5,985 crore in the preceding fiscal. In FY24, the company’s profit after tax (PAT) declined more than 6% to ₹527.58 crore compared to ₹561.85 crore in FY23. Emcure Pharma’s net worth grew by 18% to ₹2,952.28 crore compared to ₹2,501.13 crore in the preceding fiscal.

The company’s domestic sales contributed 48.28% of its total revenue from operations in FY24. Between FY20 and FY24, the company’s domestic sales had a Compound Annual Growth Rate (CAGR) of 9.73%, outpacing the domestic market, which had a CAGR of 8.19%. In terms of domestic sales for MAT FY24, the company had a covered market presence of 52.66% in the pharma market in India.

Emcure Pharma IPO key strengths

• Emcure Pharma has many competitive strengths stemming from its strong presence in the domestic market.
• The company is the 13th largest player in India and is positioned suitably to leverage its position aided by its strong distribution and marketing network.
• The company has a demonstrated capability in successfully launching new brands and has a large and diversified product portfolio in international markets. It has a proven track record of successfully entering and growing its presence through inorganic expansion.
• The pharma major has strong Research and Development (R&D) capabilities as it employs 548 qualified scientists. It has also been granted 220 patents and filed over 1,800 dossiers globally as of March 31.
• Emcure Pharma’s wide network of manufacturing facilities across India, including in Maharashtra, Gujarat, Sikkim, Karnataka, and the Union Territory of Jammu and Kashmir, helps it manufacture most of its speciality products in-house.

Emcure Pharma IPO key risks and threats

• The pharmaceutical company can be subject to regulatory action in case of quality control issues, damaging the company’s reputation, business and financial condition.

• Emcure Pharma’s inability to comply with quality standards can result in major product liability claims, the risk increases with the development of new products.

• Emcure Pharma mentions in its RHP that it depends on third-party suppliers for the manufacturing of some of its products and delays on the supply end could also negatively impact the business.

• According to the RHP, the company needs a significant amount of money for its working capital expenditures. The company has a capital-intensive business, and insufficient cash flows can prove to be a major threat to its operations.

• The company has experienced negative cash and cash equivalents in the past, according to its RHP.

Emcure Pharmaceuticals has set a price band of ₹960 to ₹1008 per share, with a lot size of 14 shares. Retail investors interested in applying for the Emcure Pharma IPO can bid for a minimum of 1 lot comprising 14 shares, which aggregates to an investment of ₹14,112 (at the upper end of the price band).

Emcure Pharma’s subscription window will remain till July 5. The allotment of the pharmaceutical company’s shares is likely to be finalised by July 8. Shares of Emcure Pharma are likely to list on the NSE and BSE on July 10.

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