Alkem Laboratories Ltd, a generic and specialty drug manufacturer, has filed its draft red herring prospectus (DRHP) with securities market regulator SEBI to float its initial public offer (IPO).
The entire issue would comprise an offer for sale by its promoters and other public individual shareholders. The company will not receive any money.
Although the company is yet to finalise a price band, the proposed issue is expected to be worth around Rs 1,500 crore, as per VCCircle estimates given the valuation ratios of its immediate listed peers.
The firm is looking to sell around 10.7 per cent stake in the IPO.
VCCircle had first reported in May that Alkem has picked three bankers for its IPO, one of the biggest in the pharma space.
Most large public-listed drugmakers floated their IPOs long ago when they were much smaller companies. Two significant proposed IPOs of PE-backed pharma companies Intas and Emcure were withdrawn over the last two years as investors struck secondary PE deals to make way for exits for previous backers.
Alkem has not raised any PE money in the past.
Its IPO is also expected to be one of the biggest among the roster of companies in the queue to go public behind names such as budget carrier IndiGo.
Here's a snapshot of the IPO:
* Total of 13 million shares of the company to be sold by shareholders.
* Bankers: Nomura, Axis Capital, JP Morgan and Edelweiss.
* Established in 1973 in Patna, Alkem later moved its business to Mumbai and is present in acute and chronic therapeutic segments with extensive brand share in central nervous system, gastro-intestinal, anti-diabetic, anti-malarial, cardiovascular, immunosuppressants, nutraceuticals, anti-infective and pain management.
* It offers generic and branded products in over 55 countries across the globe. It has a portfolio of 800 brands and has manufacturing facilities across seven locations in India.
* For fiscal year 2015, Alkem was the fifth largest pharmaceutical company in India by domestic sales and, unlike many Indian pharma companies that bank on sales in the US, derives the bulk of its revenues from the domestic market. Around three-fourth of its sales are from the Indian market.
* It claims to be the top player in the domestic market for anti-infectives and has a strong position in gastro-intestinal and analgesic segments.
* Alkem has also expanded through inorganic route having acquired ThePharmaNetwork LLC in the US, the holding company of Ascend, in July 2010 which provided it with the commercial platform for the world's largest drug market; in December 2012 it acquired manufacturing assets from NORAC, Inc. in the US, focused primarily on manufacturing specialty APIs and providing contract research and manufacturing services; in June 2009, it acquired a majority stake in Pharmacor Pty Ltd to enter the Australian market. Pharmacor targets individual pharmacies, pharmacy groups, pharmacy co-ops, aged care and hospitals to offer prescription drugs and over-the-counter generic medicines; two months ago it acquired a formulation manufacturing facility from Long Pharmaceuticals LLC in the US that has semi-solids, liquid and nasal formulation manufacturing capabilities.
* In the US, it has filed 66 abbreviated new drug applications (ANDAs) (of which 18 have received final approval and two have received tentative approval).
* The company is promoted by Samprada Singh (chairman emeritus) and his family.
* Its consolidated net revenues from operations more than doubled between FY11 and FY15 and it closed the year ended March 31, 2015 with Rs 3,783 crore. Its net profit in the four-year period rose by around 50 per cent to Rs 460.7 crore.
* Alkem's net revenues from international operations increased to 25.3 per cent in FY15 from 12.6 per cent in FY11. This shows it is reducing its dependence on the domestic market.