What you must know about the Infinium Pharmachem IPO

Infinium Pharmachem Ltd is a company that is focused in the CRAMS (contract research and manufacturing services) business. However, their major focus is on Iodine chemistry and this has remained the core area of Infinium Pharmachem Ltd. With iodine chemistry, the business lines of Infinium Pharmachem Ltd revolves around Iodine derivatives or Iodination. Infinium Pharmachem Ltd has been supplying a complete spectrum of superior quality Iodine Derivatives and APIs since the year 2003. APIs or active pharma ingredients are the inputs that go into the manufacture of pharmaceutical products.

Infinium Pharmachem Ltd current provides fully integrated services ranging from R&D to Commercial scale manufacturing and packaging for major industry clients including in pharmaceuticals, agrochemicals, nutraceuticals, speciality chemicals etc. Most of their Iodine derivatives products are made to order, but Infinium Pharmachem Ltd also has a range of off the shelf products in the iodine derivatives space. The company also undertakes to develop and manufacture confidential and rarely available Iodine compounds.

Infinium Pharmachem Ltd has clients ranging from MSMEs to MNCs operating in the field of pharmaceuticals, electronics, flavour and fragrances, cosmetics, agrochem and nutraceutical products. The manufacturing facility of Infinium Pharmachem spans across 41,000 square metres and is located in Gujarat. The plant is able to produce scale as well as high purity complex Iodine derivatives for varied applications. Its R&D centres are manned by a talented pool of scientists who devise end-to-end solutions including feasibility, optimization, and process scrutiny for commercialization. The portfolio of Infinium Pharmachem comprises of over 200 Iodine derivatives and over 7 Active Pharmaceutical Ingredients (APIs).

Read: Infinium Pharmachem IPO GMP (Grey Market Premium)

Some of the key advantages that Infinium Pharmachem brings to the table include, cost-effective CRAMS solutions, huge portfolio of complex iodine compounds, vast scale of production capacity, ability to develop complex iodine compounds. It also provides after sales support to its customers as well as support with vendor documentation and regulatory compliance.

Key terms of the Infinium Pharmachem IPO

Here are some of the highlights of the Infinium Pharmachem Ltd IPO on the SME segment of the National Stock Exchange (NSE).

• The dates of the issue are yet to be finalized and the announcement is expected to happen in this week. Most likely, the IPO is expected to open for subscription in the current fiscal year itself.
   

• The company has a face value of Rs10 per share and the issue price for the fresh issue portion has a fixed price of Rs135 per share. The difference of Rs125 per share will be the IPO premium over the par value of the stock.
   

• The company will issue a total of 18.75 lakh shares at the price of Rs135 per share aggregating to a total fund raising of Rs25.31 crore.
   

• The company has allocated 50% of the issue size for the retail investor while the balance 50% is allocated to HNI / NII investors.
   

• The minimum lot size for the IPO investment will be 1,000 shares. Thus, retail investors can invest a minimum of Rs135,000 (1,000 x Rs135 per share) in the IPO. That is also the maximum that the retail investors can invest in the IPO.
   

• HNI / NII investors can invest a minimum of 2 lots comprising of 2,000 shares and having a minimum lot value of Rs270,000. There is no upper limit on what the HNI / NII investors can apply for. The minimum lot sizes can be summarized as under.

  Application	Lots	Shares	Amount
  Retail (Min)	1	1000	₹ 1,35,000
  Retail (Max)	1	1000	₹ 1,35,000
  HNI (Min)	2	2,000	₹ 2,70,000

• Like every SME IPO, this issue also has a marketing making portion with a market maker portion allocation of 94,000 shares. Swastika Investmart Ltd will act as the market maker to the issue providing two-way quotes to ensure liquidity on the counter.
   

• The company has 3 promoters as of the IPO. These include Pravin Madhani, Sanjaykumar Patel and Mitesh Chikhaliya. Currently, the promoter and their group companies hold 100% of the company. Post the IPO, their stake will come down from the current 100.00% to 73.05%.

While Swastik Investmart Ltd will be the lead manager to the issue, Bigshare Services Private Limited will be the registrar to the issue. Since the dates of the IPO are not yet announced, we need to await clarity on the issue opening, closing, basis of allotment and other formalities. The IPO is expected to happen in the month of March2023, but we really need to wait and see when the IPO actually happens.

Financial highlights of Infinium Pharmachem Ltd

The table below captures the key financials of Infinium Pharmachem Ltd for the last 4 completed financial years. It may be noted here that FY23 flow numbers like revenues, profits and EPS are annualized based on half year data. This may not be precise picture but is good to get an approximate picture of the IPO financials of Infinium Pharmachem Ltd.

Data Source: Company DRHP filed with SEBI (# - annualized data)

The company appears to have sustained solid growth in top line but the net margins are still in single digits. The borrowings are under check but have grown sharply in the last few years. The company is in a high growth CRAMS business and that is likely to increasingly come to India as companies following the China plus one strategy. However, a lot still depends on execution.