Hello friends, how are you all? You must have seen Shark Tank India, and you must know Namita Thapar, one of its judges. So the IPO of Namita Thapar’s brand has come today, i.e., on July 3rd, 2024, which you can build in till July 5th. And we are going to cover the correct details about this IPO in this article.

Emcure Pharmaceuticals IPO: GMP

The company’s prime has been fixed at Rs 960-1,008 per share, and 14 lot sizes have been fixed. If we talk about the details of the company, what does the company do?

What does Emcure Pharmaceuticals do?

The company was incorporated in 1981, so it has been in its sector for almost 43 years. It is a pharmaceutical company that manufactures medicines, etc. So, you know what a pharmaceutical company does: it manufactures medicines, etc.

If we look at it in terms of domestic sales, i.e., in India, it comes at number 13. It is good among the companies in the pharma sector; it comes among the top companies because there are many companies in the pharma sector, there are many listed and unlisted companies, so being at number 13 is a very good thing; if we talk about revenue, 50% of the revenue comes from exports only; it comes from outside, and 50% of the revenue comes from India. Almost all of it is generated here, in India.

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In some sectors like gynecology and HIV, antiviral drugs are leading in the matter of cells. In this company, 552 scientists are employed, and after that, there are 201 registered patents. What do patents mean? If any discovery is made in medicines, etc., then a patent has to be obtained, and there are 33 pending patents; apart from that, 1800 documents have been filed, that is for these patents, etc., in different countries, so it is quite good, its research, etc. is quite good, what happens by having a good research team is that the company gets even stronger.

It has a total of 13 manufacturing facilities, so overall look at it, the pharma sector is good; it is a demanding sector, along with that, there is also competition; it is a very highly competitive business; many small companies have also come into this sector and what many small business people do now is they get third party manufacturing done, third party means they give order to some other company and sell that product in their name, so there is a lot of competition like this also, so what is it that under such competition, how is it performing, how are its financials, is it selling expensive, cheap, we will see that as well.

Cure pharmaceuticals FINANCIAL AND Fundamental.

Its financials are given from 2022 to 2024, so if we look at its assets, there is growth in assets year on year. Year-on-year growth is also seen in revenue. Revenue has increased from 5900 crores to 6700, which means there is a decent growth. The profit margins in revenue have decreased year on year. This is a negative thing. The profit margins, which were 11.5 percent, have come down to around 8 percent, so it is a very negative thing, which means that it has gone from 502 crores to 527 crores.

Look at its profits; if there is any company whose margins, etc., are decreasing or revenue is decreasing, then what happens is that the investors, the big investors, the anchor investors, are less interested, so this should not happen. Otherwise, its net worth has increased, it has reserve cash of around 22700 crores, its debt has reduced little by little, and it has a debt of 91 crores, on top of this, that also looks high as of today, 67, its debt to equity ratio is also high.

Although it is a good thing that it will raise Rs 600 crore through its fresh issue, and with that, it will pay some of its debt, so this seems like a very good thing, meaning Rs 600 crore will be used to pay off the debt, but even after that debt will remain, the RO is around 16.9, RO is around 19, which is good, above 15, its P price to earnings ratio is 36.6 and other companies in this segment, which is listed in the pharma sector, their PEI comes out to be around 18 to 57, and it is getting higher valuations than even the bigger companies like Doctor Ready, etc.

Emcure pharmaceuticals IPO details

Talking about the details of the IPO, this IPO will be open from July 3rd to July 5th. The face value is ₹10, but the share price has been fixed between ₹60 to ₹1. The market lot is 14 shares. The total issue size is 952 crores, out of which the fresh issue is 800 crores, out of which 600 crores will be used to repay its loan, and the OFS is ₹52 crores, so the OFS is more; this is a negative thing.

The discount given to the employees is ₹90 per share, ₹1 per share, and the retail portion is ₹35. The listing date is July 10th. So, these are the complete details of the IPO.

Table

Metric	Details
IPO Date	July 3, 2024, to July 5, 2024
Listing Date	To be announced
Face Value	₹10 per share
Price Band	₹960 to ₹1008 per share
Lot Size	14 shares
Total Issue Size	19,365,346 shares (₹1,952.03 Cr)
Fresh Issue	7,936,507 shares (₹800.00 Cr)
Offer for Sale	11,428,839 shares (₹1,152.03 Cr)

Should I apply for this IPO or not?

Now, the main question that arises is whether one should apply for this IP or not. If one does, then based on listing gains or long-term, before that, if none of your family members have a Demat account, then click on this link to open a Demat account absolutely free of cost.

First of all, there is a listing; as per it, GMP is going well, but one should wait for the subscription, etc. One should wait for the first day, and one should also wait for the anchor list; let the anchor list come out now; after that, we will be able to make a perfect decision.

Table

Metric	2022 (₹ Crore)	2023 (₹ Crore)	2024 (₹ Crore)
Assets	6,063.47	6,672.53	7,806.16
Revenue	5,918.86	6,031.72	6,715.24
Profit After Tax	702.56	561.85	527.58
Net Worth	1,987.55	2,501.13	2,952.28
Reserves and Surplus	1,791.03	2,293.77	2,722.40
Total Borrowing	2,102.19	2,202.42	2,091.94

What are the long term positives and negatives?

Then, let’s see what its long-term positives and negatives are. Among the positives, one is that this pharma sector is a demanding sector, which is good, meaning it is always growing. Within that, as per domestic sales, it comes at number 13, which is also a good thing, meaning it is in the leading position within the pharma sector, and it also has a lot of patents.

Patents mean I told you that if they do new research, that is also a good thing, its research and advisory team is good, revenue is good, growth and RO-RO is good, it is above 15, some money through the fresh issue will be used in creating Udaari, this also seems a good thing, what are the negatives, among the negatives, the first negative is that its margins have reduced, profit margin profit has diminished, this is a negative thing. Secondly, it has more debt, and there is more borrowing, and even after the IPO, Udaari will remain

Now it is raising money through the fresh issue, it will give some liberalization, and even after that, there is more debt, so what would you have done if you had brought less OFS, if you had got a little more fresh issue, what else would you have done, you could have paid the entire amount on debt, the lesser the debt, the stronger the company financially, then it is better, so this is also a little negative point, then if you had made the valuations a little cheaper, it would have been better, it is a little expensive.

Judgment

If you look at the rest overall, it seems like a strong and good company, which means it cannot be ignored; if it seems like such a company, then you should consult your big advisor for investment and do it based on your skills.