Glenmark Life Sciences files IPO papers with SEBI; plans to sell more than 73 lakh shares via OFS

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Under Glenmark Pharmaceuticals Ltd’s stock ownership model, the promoter and the group of promoters collectively own 13.15 crore of shares.

Glenmark Life Sciences Ltd, a subsidiary of Glenmark Pharmaceuticals Ltd, has filed a draft Red Herring prospectus (DRHP) with financial market regulator SEBI for its initial public offering (IPO). The public offering will include a new issue of Rs 1,160 crore shares and an offer for sale (OFS) of a maximum of 73.05 lakh shares with a par value of Rs 2, each. The IPO will be subject to market conditions, obtaining applicable approvals and other considerations. The sponsors of Glenmark Pharmaceuticals Limited are Saldanha Family Trust, Blanche Elizabeth Saldanha, Glenn Saldanha and Cherylann Pinto.

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Under Glenmark Pharmaceuticals Ltd’s stock ownership model, the promoter and the group of promoters collectively own 13.15 crore of shares. Leaders of the publication will be DAM Capital Advisors Ltd, BOB Capital Markets and SBI Capital Markets Ltd. The registrar of Glenmark Life Sciences will be KFin Technologies Private Ltd. Kotak Mahindra Capital Company, BofA Securities India and Goldman Sachs (India) Securities Pvt Ltd, according to DRHP.

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Industry peers rated

Upon registration, Glenmark Life Sciences will join Divis Laboratories Ltd, Laurus Labs Ltd, Shilpa Medicare Ltd, Aarti Drugs Ltd and Solara Active Pharma Sciences Ltd. Divi’s Laboratories Ltd has the highest price / earnings (P / E) ratio of 73x, while Aarti Drugs has the lowest of 11.62x. The industry average PE ratio is 31.1x.

Glenmark Life Sciences proposed to use the net proceeds of the issuance for payment of the outstanding purchase consideration to the Promoter for the spin-off of the Promoter’s API business in the Company in accordance with the Commercial Purchase Agreement (BPA ). The company also plans to use the proceeds to fund capital expenditures and general business needs. It should be noted that the amount used for general corporate purposes cannot exceed 25 percent of the net proceeds of the new issue.

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For the nine months ended December 31, 2020, Glenmark Life Sciences reported a profit of Rs 246.8 crore, while for the year ended March 31, 2020, it made a profit of Rs 313 crore. Globally, India is one of the leading suppliers of drugs and bulk formulations. Additionally, India has the highest number of USFDA-approved factories outside of the United States, as well as 44 percent of global abbreviated new drug applications. India supplies a large part of the generic drugs in the world not only to the underdeveloped countries but also to the United States and the United Kingdom. In the midst of the COVID-19 pandemic, India’s pharmaceutical industry is trying to reinvent itself and move from its long-standing dependence on the export of generics to enabling the industry to become an end-to-end drug maker.

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