Glenmark Life IPO: GMP signals issue may see strong subscription demand

Glenmark Life IPO: GMP signals issue may see strong subscription demand

Glenmark Life Sciences IPO (Initial Public Offering) is going to open for subscription on 27th July 2021 and it will remain open for bidding till 29th July 2021. While we are four days away to see how stock market responds to the Gelnmark Life public issue, Glenmark shares have already started attracting grey market observers. Glenmark shares are available at a premium of ₹300 in the grey market today, which is around 40 per cent higher from the issue price of ₹695 to ₹720. As per the market observers, it’s too early to speak about the listing gains but the way grey market has responded to the Active Pharmaceutical Ingredients (APIs) manufacturer company, we can expect strong subscription demand for the public issue.

Takeaways from Glenmark Life Sciences IPO GMP

According to the market observers, Glenmark Life Sciences IPO GMP is highly volatile as the Glenmark shares were available in the grey market at a premium of ₹200 to ₹205 yesterday. This means market is expected to respond strongly to the public issue when it opens for subscription on 27th July 2021. They said that Glenmark Life Sciences IPO GMP today at ₹300 means the market is expecting ₹300 gain per equity from the public issue when it gets listed at Indian bourses on 6th August 2021. So, market is expecting Glenmark Life Sciences IPO listing at around ₹1020 ( ₹720 + ₹300).

Advising bidders to rely on the financials of the company, while making any investment decision in regard to the public offer; Abhay Doshi, Founder, UnlistedArena.com said, “GMP is not the correct indicator of a public issue as it keeps on changing from time to time. It’s a short-term market sentiment which has nothing to do with the balance sheet of the company.”

Asked about his views in regard to the Glenmark Life Sciences IPO; Abhay Doshi of UnlistedArena.com said, “Glenmark Life Sciences is leading developer and manufacturer of select high value APIs in chronic therapeutic areas. As of march 31, 2021, it had a portfolio of 120 molecules globally and sold APIs in India and exported to multiple countries. Company intends to increase its API manufacturing facilities. Stricter controls from Chinese authorities on fine chemicals and API manufacturing create an opportunity for Indian players.”

On his views about the response from the market in regard to subscription of Glenmark Life Sciences IPO; Abhay Doshi — who deals in in Pre-IPO & Unlisted Shares — said, “The issue looks moderately priced. Owing to the buzz in primary market, the issue should witness good subscription.”

Glenmark Life Sciences IPO details

As per the Red Herring Prospectus (RHP) of the public issue, Glenmark Life Sciences IPO will open for subscription on 27th July 2021 and it will remain open for subscription till 29th July 2021. Expected Glenmark Life Sciences IPO allotment date is 3rd August 2021 while tentative date for Glenmark Life Sciences IPO listing is 6th August 2021.

Glenmark Life Sciences IPO price band has been fixed at ₹695 to ₹720.

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Glenmark Life Sciences IPO opens on July 27: 10 things to know before the issue

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Glenmark Life Sciences, the developer and manufacturer of commoditized active pharmaceutical ingredients in chronic therapeutic areas, will launch its initial public offering for subscription in the coming week.

Here are 10 key things to know before subscribing public issue:

1. Public Issue

The initial public offering comprises a fresh issue of Rs 1,060 crore and an offer for sale of up to 63 lakh equity shares by promoter Glenmark Pharmaceuticals.

2. IPO Dates

The offer will open for subscription on July 27 and will close on July 29, 2021. Anchor book, if any, will open for bidding for a day on July 26, a day before the issue opens.

3. Price Band and Fund Raising

The price band for public offer has been fixed at Rs 695 - Rs 720 per equity share.

The company is planning to raise Rs 1,497.85 crore at the lower, and Rs 1,513.6 crore at the higher end of the price band.

4. Objectives of the issue

Glenmark Life Sciences will use the proceeds for payment of outstanding purchase consideration to the promoter for spin-off of the API business from the promoter into the company pursuant to the Business Purchase Agreement dated October 9, 2018 (Rs 800 crore), for funding capital expenditure requirements (Rs 152.76 crore), and for general corporate purposes.

5. Lot Size and Reserved Portion Category-wise

The minimum application that can be made by an investor would be for 20 equity shares and in multiples of 20 equity shares thereafter. Retail investors can invest a minimum of Rs 14,400 per lot and the maximum investment would be Rs 1,87,200 (for 13 lots) at the higher end of the price band, as they are allowed to invest up to Rs 2 lakh.

The company in consultation with merchant bankers decided to reserve up to 50 percent of the offer for qualified institutional buyers, up to 15 percent for non-institutional bidders, and up to 35 percent for retail individual bidders.

All potential bidders, other than anchor investors, have to mandatorily utilise the Application Supported by Blocked Amount (ASBA) process.

6. Company Profile

In 2019, the API manufacturing business of Glenmark Pharma was sold and spun off into Glenmark Life as part of a broader reorganization designed to place Glenmark Pharma on an accelerated trajectory to attain its objectives in three different verticals, with Glenmark Life focusing on the API business. Following the spin-off, the company operates as an independent, professionally-managed global API business.

Glenmark Life Sciences is a leading developer and 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, as per Frost & Sullivan report. It also manufactures and sells APIs for gastro-intestinal disorders, anti-infectives and other therapeutic areas.

The company has strong market share in select specialized APIs such as Telmisartan (anti-hypertensive), Atovaquone (anti-parasitic), Perindopril (antihypertensive), Teneligliptin (diabetes), Zonisamide (CNS) and Adapalene (dermatology). The company also increasingly provides contract development and manufacturing operations (CDMO) services to a range of multinational and specialty pharmaceutical companies.

As of March 2021, Glenmark Life had a portfolio of 120 molecules globally and sold APIs in India and exported APIs to multiple countries in Europe, North America, Latin America, Japan and the rest of the world (ROW). As of May 31, 2021, it had filed 403 Drug Master Files (DMFs) and Certificates of suitability to the monographs of the European Pharmacopoeia (CEPs) across various major markets (i.e. United States, Europe, Japan, Russia, Brazil, South Korea, Taiwan, Canada, China and Australia).

As of March 31, 2021, 16 of the 20 largest generic companies globally were its customers.

It currently operates four multi-purpose manufacturing facilities at Ankleshwar and Dahej in Gujarat, and Mohol and Kurkumbh in Maharashtra with an aggregate annual total installed capacity of 726.6 KL as of March 31, 2021.

The company intends to increase its API manufacturing capabilities at Ankleshwar facility during FY22, and Dahej facility during FY22 and FY23 by an aggregate annual total installed capacity of 200 KL. This additional production capacity is expected to help the company further expand generic API production and also grow oncology product pipeline.

7. Strengths and Strategies

a) It has leadership in select high value, non-commoditized APIs in chronic therapeutic areas.

b) It has strong relationships with leading global generic companies.

c) It has quality-focused compliant manufacturing and R&D infrastructure.

d) It is focused on sustainability in operations through meaningful interventions in environment management, safety initiatives in operations and occupational health of workforce.

e) It strives to achieve cost leadership across products through careful monitoring and continuous effort.

f) It has a professional and experienced management team with proven track record.

Strategies

a) It intends to expand the geographic focus, API portfolio and scope of its operations.

b) It intends to grow its CDMO business.

c) It intends to expand its production capacities.

d) It continually aims to improve financial performance by focusing on enhancing operational efficiencies.

8. Financials

Glenmark Life reported profit for the financial year FY21 at Rs 351.58 crore on revenue of Rs 1,885.16 crore, against profit of Rs 313.09 crore on revenue of Rs 1,537.31 crore in FY20. Profit in the financial year FY19 stood at Rs 195.59 crore on revenue of Rs 886.42 crore.

9. Promoters and Management

Glenmark Pharmaceuticals is the promoter of the company, holding 100 percent of the pre-offer stake in Glenmark Life.

Glenn Saldanha is the Chairman and non-executive director of the company. He holds a bachelor’s degree in pharmaceutical sciences from University of Bombay. He also holds a master’s degree in business administration from the Leonard N. Stern School of Business at New York University. He is also the chairman and managing director of promoter, Glenmark Pharmaceuticals.

VS Mani is a non-executive director of the company. He is a qualified chartered accountant. Prior to joining the company, he was the president (finance) at the Bhartiya City Developers, and chief financial officer at Cipla. He is also an executive director and global chief financial officer of Glenmark Pharmaceuticals.

Yasir Rawjee is the Managing Director and Chief Executive Officer of the company. He holds a bachelor’s degree in science from St. Xavier’s College, University of Bombay and a bachelor’s degree in science (technology) from University Department of Chemical Technology, University of Bombay. He also holds a PhD from Texas A&M University, USA. Prior to joining the company, he was the head of global API operations at Mylan Laboratories, senior vice president at Matrix Laboratories, and has worked in GlaxoSmithKline in the USA.

Sumantra Mitra is the executive director and vice president – human resources department of the Company. He holds a bachelor’s degree in social work from Visva Bharati University and a master’s degree in social work from University of Pune. He holds a diploma in labour law and labour welfare from Symbiosis Society’s Law College, Pune. Prior to joining Glenmark Life, he was the vice president – human resources at Nilkamal, also worked with Mahindra & Mahindra in the automotive sector, and Glenmark Pharmaceuticals.

Sridhar Gorthi, Manju Agarwal, Taruvai Laxminarayanan Easwar, and Gita Nayyar are Independent Directors on the board.

Bhavesh Pujara is the Senior Vice President and Chief Financial Officer of the company. He is a chartered accountant from the Institute of Chartered Accountants of India. He also has a degree in bachelor of commerce from the Maharaja Sagajirao University of Baroda. Prior to joining the company, he has worked with Lupin. He has also been associated with Eli Lilly and Company (India), and Dr. Reddy’s Laboratories.

10. Allotment, refunds and listing dates

Glenmark Life will finalise the IPO share allotment around August 3, and the funds will be refunded or unblocked from ASBA account around August 4, 2021.

Eligible investors will get their shares in their demat accounts around August 5, and shares will debut on the bourses on August 6.

Its equity shares are proposed to be listed on BSE and NSE.

Kotak Mahindra Capital Company, BofA Securities India and Goldman Sachs (India) Securities are the global co-ordinators and book running lead managers to the offer. DAM Capital Advisors, BOB Capital Markets and SBI Capital Markets are the book running lead managers to the offer.

Glenmark Life’s Rs 1,514 crore IPO to open on July 27

Did you Know? Stock score of Glenmark Pharmaceuticals Ltd moved down by 1 in a month on a 10-point scale. View Latest Stock Report »

Mumbai: The Rs 1,514-crore initial public offering (IPO) of Glenmark Life Sciences (GLS) will open for subscription on July 27. The issue, which is priced in a band of Rs 695 to Rs 720 per share, will close on July 29.The offer consists of a fresh issue of shares worth Rs 1,060 crore and an offer for sale of up to 63 lakh shares worth Rs 454 crore by its promoterGlenmark’s share sale will be the 27th IPO of the year and fifth offering in July after GR Infraprojects, Clean Science and Technology, Zomato, and Tatva Chintan Pharma.The company is a manufacturer of select high-value, non-commoditised active pharmaceutical ingredients (APIs) in chronic therapeutic areas.The high networth category can bid for 15 per cent of the offer, while 35 per cent of the issue is available for individual retail investors. Bids can be made for a minimum of 20 shares and in multiples of 20 shares thereafter.Kotak Mahindra Capital, BofA Securities, Goldman Sachs (India), DAM Capital Advisors, BOB Capital Markets and SBI Capital Markets are the bankers to the offer.For the year ended March 31, the company posted a revenue of Rs 1,885 crore compared to Rs 1,537 crore in FY20. Net profit jumped 12 per cent in FY21 to Rs 352 crore compared to Rs 313 crore in the previous year.