What You Must Know About Akums Drugs & Pharmaceuticals IPO: Price Band ₹646 to ₹679 Per Share

About Akums Drugs & Pharmaceuticals Ltd

Established in 2004, Akums Drugs & Pharmaceuticals Limited stands as leading pharmaceutical contract development & manufacturing organization (CDMO) offering comprehensive suite of products & services in India & abroad. Specializing in end-to-end solutions for product development & manufacturing, company excels in research & development (R&D) of formulations, regulatory dossier preparation & submission, & various testing services. Akums also manufactures & sells branded drugs & active pharmaceutical ingredients (APIs). As CDMO, Akums produces extensive range of dosage forms, including tablets, capsules, liquid medicines, vials, ampoules, blow-filled closures, topical preparations, eye drops, dry powder injections, & even gummy bears. Impressively, company has commercialized 4,025 formulations across more than 60 dosage forms. In financial year 2023, Akums manufactured formulations for 26 of top 30 pharmaceutical companies in India by revenue.

Operating ten manufacturing units, company boasts cumulative production capacity of 49.21 billion units annually as of September 30, 2023. Plans are underway to expand this capacity with two additional production units slated for commissioning in FY 2025. Akums' production facilities hold accreditations from prestigious global regulatory bodies such as European Good Manufacturing Practice (EU-GMP), World Health Organization Good Manufacturing Practice (WHO-GMP), & United States National Sanitation Foundation (US NSF). As of September 30, 2023, company employed total of 16,463 individuals, comprising 7,211 full-time employees & 9,252 contract employees, reflecting its robust operational scale & commitment to excellence.

Highlights of Akums Drugs & Pharmaceuticals IPO

Here are some of highlights of Akums Drugs & Pharmaceuticals IPO on segment of National Stock Exchange (NSE).

•    Akums Drugs & Pharmaceuticals IPO is book-built issue of ₹ 1,856.74 crores, comprising fresh issue of 1 crore shares worth ₹ 680.00 crores & offer for sale of 1.73 crore shares worth ₹ 1,176.74 crores

•    IPO opens for subscription on July 30, 2024, & closes on August 1, 2024, with allotment expected to be finalized on August 2, 2024. shares are set to list on BSE & NSE on August 6, 2024.

•   IPO price band is ₹646 to ₹679 per share, with minimum lot size of 22 shares, requiring minimum investment of ₹14,938 for retail investors.

•   Minimum investment for sNII is 14 lots (308 shares) amounting to ₹209,132, & for bNII, it is 67 lots (1,474 shares) amounting to ₹1,000,846.

•    ICICI Securities Limited, Axis Bank Limited, Citigroup Global Markets India Private Limited, & Ambit Private Limited are book running lead managers, with Link Intime India Private Ltd as registrar.

Akums Drugs & Pharmaceuticals IPO – Key Dates

Data Source: Company RHP

In ASBA applications, there is no refund concept. total application amount is blocked under ASBA (applications supported by blocked amounts) system. Once allotment is finalized, only amount is debited to extent of allotment made & lien on balance amount is automatically released in bank account. credit of shares to demat account on Aug 5th 2024, will be visible to investors under ISIN Code. This credit to demat account is only applicable to extent of allocation of shares & if no allocations are made in IPO, then no credit would be visible in demat account.

Akums Drugs & Pharmaceuticals IPO Allocation

The Akums Drugs & Pharmaceuticals IPO allocates its shares as follows: at least 75% of net offer is reserved for Qualified Institutional Buyers (QIBs), no more than 10% is allocated for retail investors, & at least 15% is reserved for Non-Institutional Investors (NIIs).

Data Source: Company RHP

The Akums Drugs and Pharmaceuticals IPO offers investors the opportunity to bid for shares in specified lot sizes. Retail investors can bid for a minimum of 22 shares, amounting to ₹14,938, and a maximum of 286 shares, totaling ₹194,194. Small High Net Worth Individuals (s-HNI) can bid for a minimum of 308 shares, costing ₹209,132, and a maximum of 1,452 shares, amounting to ₹985,908. Big High Net Worth Individuals (b-HNI) can bid for a minimum of 1,474 shares, amounting to ₹1,000,846. Table below captures break-up of lot sizes for different categories.

There are no upper limits for investments by HNIs / NIIs in IPO of Akums Drugs & Pharmaceuticals Ltd.

Financial Highlights: Akums Drugs & Pharmaceuticals Ltd

The table below captures key financials of Akums Drugs & Pharmaceuticals Ltd for last 3 completed financial years.

Data Source: Company RHP filed with SEBI

Here are some of key takeaways from financials of company for last 3 years; i.e., from FY22 to FY24, being latest year.

•    Revenue Growth: Akums Drugs & Pharmaceuticals Limited experienced 13.81% increase in revenue from ₹3,700.93 crore in FY 2023 to ₹4,212.21 crore in FY 2024.

•    Profit Decline: company's profit after tax (PAT) dramatically dropped by 99.19%, from ₹97.82 crore in FY 2023 to just ₹0.79 crore in FY 2024.

•    Asset Growth: Total assets grew from ₹3,266.53 crore in FY 2023 to ₹3,516.37 crore in FY 2024.

•    Net Worth: net worth slightly decreased from ₹717.19 crore in FY 2023 to ₹709.50 crore in FY 2024.

•   Reserves & Surplus: Reserves & surplus slightly declined from ₹868.70 crore in FY 2023 to ₹861.01 crore in FY 2024.

•   Total Borrowing: Total borrowing reduced from ₹536.97 crore in FY 2023 to ₹491.56 crore in FY 2024.

•   Previous Performance: In FY 2022, company had loss of ₹250.87 crore, indicating significant turnaround in profitability by FY 2023, despite drop in FY 2024.
 

The company's extensive portfolio & strong market presence, demonstrated by their service to 26 of top 30 Indian pharmaceutical companies, highlight its business strength. With plans to expand production capacity & facilities accredited by global regulatory bodies, Akums is well-positioned in pharmaceutical sector.

Given growth in pharmaceutical & healthcare sector driven by increasing global health awareness & demand for medications, Akums' IPO could attract significant interest. Investors might view IPO as opportunity to invest in company with strong foundation & growth potential despite recent profit decline, especially considering ongoing expansion & strategic importance of pharmaceutical sector.