Emcure Pharma IPO: GMP rises sharply ahead of opening for subscription on July 3

Shares of Emcure Pharmaceuticals are trading at a premium of Rs 270 on the unlisted market on Saturday (June 29), days ahead of it opening for subscription.

The grey market is an informal ecosystem where shares in an IPO are traded before allotment and till the listing day. Most investors keep an eye on GMP to get an idea of ​​the listing price.

The initial public offering (IPO) of the Pune-based company will open on July 3 and close on July 5.

Emcure Pharma will sell its shares at a price of Rs 960 to Rs 1,008 per share, where investors can bid in one lot of 14 equity shares and in multiples thereafter.

At the upper end of the price band, the company plans to raise a total of ₹1,951.04 crore through this issue.

The IPO consists of fresh share sale of Rs 800 crore and an offer for sale (OFS) of up to 1.14 crore equity shares by its promoters and existing shareholders.

Promoters Satish Ramanlal Mehta, Sunil Rajnikant Mehta, Namita Vikas Thapar and Samit Satish Mehta are the selling shareholders in the OFS.

Apart from this, Pushpa Rajnikant Mehta, Bhavana Satish Mehta, Kamini Sunil Mehta, BC Investments IV, Arunkumar Purushottamlal Khanna, Barjis Meenu Desai and Sonali Sanjay Mehta will also sell shares in the OFS.

About 50% of the public offering is set aside for qualified institutional bidders (QIBs), while non-institutional investors will have 15% of the net offering. The remaining 35% of the net offering will be allotted to retail investors.

Emcure Pharma has also reserved 1,08,900 shares for eligible employees of the company, who will get a discount of Rs 90 per share.

The proceeds from the fresh issue will be used for repayment and/or prepayment of all or part of certain outstanding borrowings availed by the company; and for general corporate purposes. Additionally, the proceeds from the OFS will be paid to the selling shareholders.

Emcure Pharmaceuticals competes with Dr. Reddy's Laboratories, Cipla, Alkem Laboratories, Torrent Pharmaceuticals, Mankind Pharma, Abbott India and JB Chemicals.

Established in 1981, Emcure Pharmaceuticals develops, manufactures and globally markets a broad range of pharmaceutical products across several key therapeutic areas.

Emcure's revenue grew by 11.33% and profit after tax (PAT) declined by -6.1% between the financial year ending March 31, 2024 and March 31, 2023.

The company's EBITDA or earnings before interest, tax, depreciation, and amortization for the previous fiscal year (FY24) grew 4% to Rs 1,229.7 crore, but margins fell 120 basis points to 18.5%.

Kotak Mahindra Capital Company, Axis Capital, JP Morgan India and Jefferies India are the book running lead managers to the issue, while Link Intime India is the registrar to the issue.

The equity shares of the company will be listed on both BSE and NSE, the likely date of listing is Wednesday, July 10.

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