The mega initial public offering of Gland Pharma will open for subscription next week at a price of Rs 1,490-1,500 per share. Backed by Chinese firm Fosun Pharma, the company is looking to raise Rs 6,479 crore through the public issue which opens Monday, November 9 and closes on November 11. The IPO will be a mix of a fresh issue worth Rs 1,250 crore and an offer for sale (OFS) from existing shareholders, including Fosun Pharma which will consist of 34.8 million equity shares. Gland Pharma’s IPO will be India’s biggest ever public issue by a pharmaceutical firm.
Along with Fosun Pharma, other selling shareholders include Gland Celsus Bio Chemicals Private Limited, Empower Discretionary Trust, and Nilay Discretionary Trust. The pre-ipo shareholding shows that Fosun Pharma currently holds a 74% stake in the company which will go down to 58% post IPO. On the hand, the combined shareholding of the other selling shareholders stands at 20.47%. Of the OFS, 19.3 million shares will be closed by Fosun Pharma, 10.04 million shares by Gland Celsus Bio Chemicals, 3.5 million shares by Empower Discretionary Trust and 1.8million equity shares by Nilay Trust. Total stake dilution will be somewhere around 26.48%, Gland Pharma said in a press conference today.
Gland Pharma plans to use the net proceeds from the fresh issue towards funding incremental working capital requirements, for capital expenditure requirements, and for general corporate purposes. Addressing the concerns about its Chinese promoter, Gland Pharma’s Managing Director, Sirinivas Sadu said that the company works in the healthcare industry which is an essential sector so it does not think that any restrictions related to Chinese investment will impact the company.
Financially, Gland Pharma revenue has grown 27.4% CAGR between financial year 2018 and the last fiscal year. In the last financial year Gland Pharma’s revenue from operations was at 2,633 crore. Net profit in the same time frame has grown 55.2%. Net profit in financial year 2020 was Rs 772 crore. Gland Pharma sees robust cash flows from operations. The firm largely focuses on business to business model and its primary offerings are in the injectables domain.
In the grey market the stock was already ruling a premium of Rs 180-190 per share till yesterday. Seeing the strong demand for the healthcare sector stocks the premium is expected to stay strong.
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