Glenmark Life Sciences Limited: IPO Review

Glenmark Life Sciences Limited incorporated is a wholly-owned subsidiary of Glenmark Pharmaceuticals Limited (“Glenmark”), a research-oriented, innovation led, global pharmaceutical company, spun off as part of a broader reorganization. It is a leading developer and manufacturer of select high value, non-commoditized active pharmaceutical ingredients in chronic therapeutic areas, including cardiovascular disease (“CVS”), central nervous system disease (“CNS”), pain management, gastro-intestinal disorders, anti-infectives, other therapeutic areas and diabetes.

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It also has a strong market share in select specialized APIs such as Telmisartan (anti-hypertensive), Atovaquone (anti-parasitic), Perindopril (antihypertensive), Teneligliptin (diabetes), Zonisamide (CNS) and Adapalene (dermatology). As of March 31, 2021, The company had a portfolio of 120 molecules globally and sold APIs in India and exported to multiple countries in Europe, North America, Latin America, Japan and the rest of the world. Currently, it has 4 manufacturing facilities at Ankleshwar and Dahej in Gujarat and Mohol and Kurkumbh in Maharashtra State with an aggregate annual installed capacity of 725.8 KL as of December 31, 2020

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Promoters & Shareholding:

Glenmark Pharmaceuticals Limited is the company promoter with pre issue holding of 100%.

Public Issue Details:

Offer for sale: Fresh issue of approx. 14,722,222 equity shares of Rs. 2 aggregating up to Rs. 1,060 Cr and OFS of approx. 6,300,000 equity shares aggregating up to Rs. 453.60 Cr.

Total IPO Size: Rs. 1,513.60 Cr.

Price band: Rs. 695 – Rs. 720.

Objective: For payment of outstanding purchase consideration to the promoter for the spin-off of the API business, funding capital expenditure requirements and for general corporate purposes.

Bid qty: minimum of 20 shares (1 lot) for Rs. 14,400 and maximum of 13 lots.

Offer period: 27th July 2021 – 29th July 2021.

Date of listing: 6th Aug 2021.

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  • Leading manufacturer of selected specialized APIs.
  • Strong R&D capabilities.
  • Professional and experienced management team.
  • Strong relationships with leading global generic pharmaceutical companies.
  • Strong financial performance.


  • Significant portion of its revenue from a few key customers. Any loss of its key customers can deteriorate its financial condition and prospects.
  • The company has a liability of 1162 Crores payable to the parent company as a consideration. a significant portion of the IPO proceeds may go towards paying that off.
  • Since the company operates in the Pharma sector, it is subjected to strict government regulatory scrutiny & non compliance will affect their business.
  • Company derives significant revenue from API business which has limited number of therapeutic categories. If these businesses do not perform well as expected, it can have impact on company financial condition

Also Read : 12 Rules of Value Investing

Subscribe or avoid?

The global “API” market was estimated to be around $181.3 Bn in 2020 and is expected to grow at a CAGR of 6.2% to reach $259.3 Bn by 2026. India currently holds about 6% of the market share with an estimated market size of about $11 Bn in 2020; however, India is expected to have the highest growth rate of about 9.6% in the next five years owing to the government initiatives such as production linked incentive scheme (PLI), Aatmanirbhar Bharat Abhiyaan (ABA) etc which is expected have positive impact on the company and its business.

On the financial side, Company has posted strong revenue & profit growth in the last 3 years. Company reported revenues Rs 1,885.97 Cr, Rs 1549.30 Cr and Rs 886.86 Cr in FY21, FY20 and FY19 respectively. Company reported net profit of Rs. 351.58 cr, Rs. 313.09 Cr and Rs. 195.59 Cr in the FY21, FY20 and FY19 respectively.

For the last 3 years average EPS of Rs 28.76, the P/E ratio is 25x. On the upper price band of Rs 720 and EPS of Rs 32.61 for FY21, the P/E ratio works out to be 22.08x. There are listed peers like Divis Laboratories Limited where it is trading at P/E 63.65x and Aarti Drugs Limited at P/E of 24.28x and industry average P/E is 37x. Considering all the above factors and given the growth prospects of the API segment, though not very cheap this issue seems to be moderately priced, investors looking for listing gains may “SUBSCRIBE” to the issue, however if you are a value investor you could as well buy on dips

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