Glenmark Life Sciences IPO : Subscribe or NOT?

The data has been compiled from various sources and might have small difference but overall theme is to subscribe or not — we will focus on that

Glenmark Life Sciences IPO– Incorporated as Zorg Laboratories Private Limited in 2011 and acquired by Glenmark Pharmaceuticals Limited in 2018,.

Business — Glenmark Life Sciences Limited is one of the leading developer and R&D driven manufacturer of select high value, non-commoditized active
pharmaceutical ingredients (APIs) in chronic therapeutic areas, including cardiovascular disease (CVS), central nervous system disease (CNS),
pain management and diabetes

Region of operation — The company sells APIs in India and exports to multiple countries in Europe, North America, Latin America, Japan and the rest of the world (ROW)

Revenue/Product Mix – India 56%, Exports 44%

Regulated 66%, Emerging 33%, others 1%

Offer purpose — The IPO is fresh issuance of shares worth ₹1060 crore and an offer for sale to the tune of ₹454 crore by existing promoters and shareholders.Proceeds from the fresh issue would be used towards funding capital expenditure requirements for expansion of the company’s manufacturing facility; debt clearance and general corporate purposes.

Risks —

Revenue of ~55% from Top 5 Customers leads to concentration risk with promoter being the major customer itself

High dependency on China for key raw materials

High dependency on API business

Strength

Strong Promoter
Key Strong customers
Consistent track record of financial performance.
International presence with export to regulated markets

Future

Company has been growing well in revenue and profitability. High Value and non commoditized API are the key. Promoter backing also there. API have good future and Expansion of facilities and entering into CDMO will help company for next phase of growth

Valuations

Valuations are decent and comparatively lesser than peers

Should we apply?

People can subscribe for long term and keep on adding on dips & review holdings with each quarter earnings

Expecting good listing gains.

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