Akums Drugs and Pharma Ltd., a leading WHO-GMP certified pharmaceutical company, announces its IPO

27/07/2024 BILKUL ONLINE

Akums Drugs and Pharma Ltd is the largest India-focused CDMO in terms of revenue, production capacity and clients served during the Financial Year 2023 (among CDMOs assessed by F&S) (Source: F&S Report)

BILKULONLINE

Company Overview

Name: Akums Drugs and Pharma Ltd.

Business: Akums is a leading pharmaceutical contract manufacturing company in India, known for producing a wide range of pharmaceutical products, including tablets, capsules, injectables, and oral liquids.

Market Presence: The company operates both in the domestic and international markets and has a strong reputation for quality and compliance.

The company has announced a price band of Rs. 646 – Rs. 679 per equity shares of Rs. 2 each. The overall size of the issue will be approx. 27345163 shares worth Rs. 1856.74 cr. The issue opens for subscription on July 30, 2024, and will close on August 01, 2024.

The IPO includes a fresh issue of 1,00,14,727 shares aggregating up to ₹680.00 Cr and it also includes an offer for sale of 1,73,30,435 shares aggregating up to ₹1,176.74 Cr. The price range is ₹646 to ₹679 per share and the lot size is 22 shares. The allotment is scheduled to be finalized on 2 August 2024.

Sandeep Jain and Sanjeev Jain are the Managing Directors of the company. While interacting with the media in Ahmedabad, the duo explained in detail about the proposed IPO of the company and how the journey of the company was.

Sandeep Jain said “We believe that maintaining adequate control of the quality of our products is critical to our success and continued growth. We have formulated and adopted a quality control policy prescribing stringent quality control practices to ensure optimum quality standards. We leverage technology to ensure quality control and compliance across our operations. We perform regular audits on our manufacturing units and regularly review and update our procedures and practices to ensure compliance with international regulatory requirements. Further, our contractual arrangements provide for periodic inspections and audits by our clients to ensure adherence to quality standards and other specifications. Our manufacturing units are also subject to periodic audits by regulatory authorities”.

Sanjeev Jain reiterated that “We employ internal controls and standards to ensure consistency, quality and adherence to regulatory and contractual guidelines in relation to our products. This involves identifying various process elements at each level, defining appropriate quality criteria for each element, and developing suitable metrics to measure the efficiency and results of the process. To ensure accuracy, we maintain batch manufacturing and production records. Our stability centres are in compliance with ‘ICH Q1A (R2) – Stability testing of new drug substances and drug products’ guidelines issued by the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use.”

Sumeet Sood the CFO of Akum explained the financial nuances of the company and the future ahead in its finance segment. He explained that “The pharmaceutical company has reserved 75% of the net issue for qualified institutional buyers (QIBs) and 10% of the net issue for retail investors. The remaining 15% of the net issue has been set aside for non-institutional investors (NIIs)”.

Sood said “The Company plans to use the money raised via the public issue for repayment or prepayment of debt. The company also plans to use the money raised to fund incremental working capital requirements and inorganic growth initiatives through acquisitions”.

Kanishk Jain, Director of the company was also present at the media interaction along with Sahil Maheshwari, Akum’s General Manager Strategy. Praveen Sangal represented the Ambit finance.

The company has shown robust profitability, supported by its efficient operations and strategic market positioning.

Akums’ strong market position and growth prospects make it an attractive investment.

Consider the company’s plans for expansion and how they align with market trends and demand.

Akums Drugs and Pharma key financials and competitors

Akums Drugs and Pharmaceuticals’ revenue grew nearly 14% to ₹4,212.21 crore in FY24 compared to ₹3,700.93 crore in FY23. The company’s profit-after-tax declined nearly 99.1% to ₹79 lakh in FY24 compared to ₹97.82 crore in FY23. The pharma company’s net worth fell 1% to ₹709.5 crore compared to ₹717.19 crore in FY23.

Akums is among the largest domestic market-focused Indian Contract Development and Manufacturing Organisations (CDMOs) on a revenue basis. The company had a market share of 9.3% by value in FY23 in the total addressable Indian domestic CDMO market and 8.8% by volume in the total Indian Pharmaceutical Market in FY23. In the Indian domestic CDMO market, Akums had a market share of 29.4% by value in FY23.

The company’s primary competitors are other contract manufacturers who provide outsourcing services for the production of pharmaceutical and nutraceutical products. Tirupati Medicare and Innova Captab Ltd are the company’s key competitors.